On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3343-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Fuentes and Simonelli.
Plaintiff Irving Isko commenced this action against his former employer, defendant Engelhard Corporation (Engelhard), alleging that it breached its fiduciary and contractual obligation to him by refusing to honor his request to change the payment instructions for a supplemental retirement annuity, which designated his ex-wife, defendant Kathe Jados, as the contingent survivor annuitant. Isko appeals from six orders, including the December 18, 2007 order imposing upon him the burden to disprove that the annuity was an inter-vivos gift to Jados; the July 2, 2008 order awarding Jados counsel fees of $200,000; the July 16, 2008 final judgment; and the October 7, 2008 order denying his motion for judgment notwithstanding the verdict (JNOV), or alternatively, for a new trial. We affirm in part, reverse in part, and remand for further proceedings.
The following facts are derived from the evidence presented at a hearing before the trial court.
Isko, an attorney, began his employment with Engelhard in 1956. In 1981, he became President and Chief Executive Officer, with an employment contract commencing on May 20, 1981 and ending on May 20, 1986.
Engelhard offered its employees a retirement benefits plan that had two components: (1) the "Retirement Income Plan," which was a tax qualified defined benefit pension plan (the Pension Plan), and (2) the "Supplemental Retirement Program," a non-tax-qualified retirement program comprised of two parts, the "Excess Benefit Plan" and the "Supplemental Executive Retirement Plan."
The Excess Benefit Plan is at issue in this case. It provides that an employee may elect that benefits payable to him or her be paid to a beneficiary by filing a written application with the Pension and Employee Benefit Plans Committee (Committee) not less than sixty days prior to the date benefits payable to the employee under the Pension Plan commence to be paid, and that "[n]o employee, spouse, child, beneficiary or other party shall have any interest in amounts due and payable under the Excess Benefit Plan . . . until such amounts are actually distributed[.]" The Plan also provides that the Committee's determination of any question or matter arising thereunder shall be final and binding.
Prior to their marriage on August 1, 1981, Isko and Jados entered into an antenuptial agreement. The agreement provided, in part, that the parties hereto agree that the property listed in Exhibit A attached hereto and any other property . . . shall be and remain the separate property of the party[.]
All property received by a party as gifts, bequests or inheritances (whether received before or during the marriage of the parties) shall be and remain the separate property of the party receiving the property.
[E]ach party hereto waives, releases, relinquishes and renounces any and all rights he or she may otherwise have during the lifetime of the other in such separate property of the other . . . including any right to take any of such separate property of the other by equitable distribution upon the divorce or separation of the parties[.].
Nothing in this Agreement shall preclude either party from making gifts, devises or bequests to the other party, and the waivers herein contained shall not apply to any such gifts, devises or bequests.
In Exhibit A, Isko listed as his separate income "a pension in an annual amount," along with the formula that would be applied to determine the pension amount.
In November 1983, Isko elected the 100% joint and contingent survivor annuity option for the benefits paid under the Pension Plan, and named Jados as the contingent survivor annuitant. The election also applied to the Excess Benefit Plan.
According to Jados, Isko told her in January 1984, that he was retiring. Jados advised Isko that she was pregnant, expressed her concern for how they were going to live, and told him she "wanted to make sure things were taken care of." Isko did not dispute telling Jados that he would receive a "golden parachute," that he would give her the pension, and that Jados thanked him for doing so and said she felt better knowing that if anything happened to him, she would be able to care for their child. The child was born in October 1984.
Isko retired on February 21, 1984. Pursuant to his agreement with Engelhard, he would receive a lump sum payment of the salary remaining under his employment contract and bonuses stocks he would have received had he continued to work until the end of his employment contract. He would also begin receiving benefits under the Pension Plan on May 20, 1986. Engelhard advised Isko that his prior elections for the annuity "will stand unless changed by you prior to June 1, 1986."
In 1983, and again in 1985, Isko executed a last will and testament bequeathing certain property to "my wife [Jados], if she survives me and I am neither divorced nor separated from her at the time of my death." At the time of the 1985 will, Isko compiled a list of his current assets, which indicated that the "non-probate assets which will pass to [Jados]" included "a pension of $155,00 per year and the IRA valued at $2.5 million."
In February 1986, Isko told Jados that because she was getting the pension, she had to sign documents relating to his request for a lump-sum payment from the Pension Plan, which he would place into an Individual Retirement Account. Jados signed the documents confirming her consent to the lump sum payment. In March 1986, Isko submitted a number of documents to Engelhard, including a retirement application, requested the lump sum payment, and confirmed his election of the 100% joint and contingent survivor annuity for the Excess Benefit Plan with Jados as the contingent survivor annuitant.
Isko and Jados also signed and submitted "Payment Instructions" for the Excess Benefit Plan, which Isko had prepared. Those instructions again confirmed Isko's election of the 100% joint and contingent survivor annuity option with Jados as the contingent survivor annuitant, provided that after his death, payment shall be made to her, and indicated that "[t]hese instructions shall remain in force and effect until revoked by a writing filed with Engelhard[.]" Jados signed the Payment Instructions because she ...