On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Mercer County, Docket No. FM-11-25971-87.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 4, 2010 - Decided
Before Judges Axelrad,*fn1 R. B. Coleman and Lihotz.
The opinion of the court was delivered by LIHOTZ, J.A.D.
In this post-judgment matrimonial matter, defendant Thomas Barr appeals from a February 20, 2009 Family Part order confirming plaintiff's percentage interest in his military pension and the denial of his motion for reconsideration filed October 6, 2009. Defendant argues the equitable distribution provisions of the parties' property settlement agreement (PSA) incorporated into their final judgment of divorce limited plaintiff's interest in his pension to a percentage of its value earned during the marriage and there was no intention to distribute increases resulting from his post-judgment, pre-retirement promotion. Defendant additionally challenges portions of the order establishing the tax impact attributable to plaintiff's share of the asset and her award of counsel fees and costs.
The trial court, persuaded by In re Marriage of Hunt, 909 P.2d 525 (Colo. 1995), concluded plaintiff had an equitable interest in all post-dissolution pension increases resulting from defendant's promotion. Following our review of the arguments raised on appeal, we reverse.
The parties were married on August 3, 1968, and divorced by entry of a final judgment dated August 31, 1987. The parties settled all collateral issues by executing a PSA, entered into on April 20, 1987. That PSA was incorporated into the final judgment of divorce.
At the time of separation, defendant had completed eleven years of active duty in the Air Force, achieving the rank of Captain. Although defendant had not yet qualified to receive a pension from the military, paragraph 6C of the PSA entitled "Personal Property," provided: "The Wife will receive 50% of Husband's pension benefits attributable to his 11 years in the military service only. Such benefits are to be distributed when Husband commences receiving same."
Following the divorce, defendant joined the Air Force Reserves. In April 2006, he retired after reaching the rank of Major. At that point, defendant's total combined years of active duty and reservist military service qualified him to receive retirement benefits.
Upon retirement, in compliance with the PSA, defendant consulted with plaintiff and they agreed she would receive forty-two percent of his monthly benefit. The parties also arranged for plaintiff to return to defendant fifteen percent of each payment to satisfy the income taxes attributable to the monies paid to her. Plaintiff's share increased with each cost of living adjustment defendant was granted, in September 2006, February 2007 and again in February 2008.
In 2007, defendant suggested the Defense Finance and Accounting Service (DFAS) could directly disburse plaintiff's share of his pension. In this way, plaintiff could avoid returning the sums for taxes, as she would directly receive the money and declare the income on her individual income tax returns. DFAS rejected plaintiff's submission because she failed to submit a court order certified within ninety days of service upon DFAS. Additionally, DFAS needed the parties' certifications stating the percentage of defendant's retired pay agreed to be paid to plaintiff each month. When plaintiff asked defendant to certify she was entitled to forty-two percent of his disposable retirement pay, he declined. In March 2008, defendant ceased making monthly payments to plaintiff, with the exception of $1,000 remitted in July 2008.
On January 9, 2009, plaintiff moved for enforcement of litigant's rights. She sought defendant's immediate compliance with the PSA, requesting he be ordered to disburse forty-two percent of his monthly benefit to her, pay forty-two percent of all past monthly payments, and satisfy her counsel fees and costs incurred in presenting her motion.
Defendant responded. He admitted the PSA gave plaintiff an interest in his monthly retirement benefit, but disputed she was entitled to receive forty-two percent. Defendant argued plaintiff's interest must be calculated without consideration of the increased benefit directly attributable to his post-dissolution promotion.
Finding the terms of the PSA limited plaintiff's share in the asset only by "the years of defendant's service at the time of divorce," the court rejected defendant's argument that plaintiff's percentage interest was also limited to "the wage level earned during the marriage." Further, the court found defendant's conduct of calculating and paying plaintiff forty-two percent for two years evinced the parties' intent of the amount of her interest. The Family Part judge granted plaintiff's motion and ordered she receive "42% of [d]efendant's military service pension going forward." In a separate order, the court required defendant to satisfy the accumulated arrears.
Defendant's motion for reconsideration was granted in part. The court reduced the amount of the accumulated arrearages by the taxes due on sums paid to plaintiff. Otherwise, defendant's request to reduce the percentage of plaintiff's interest in his retirement benefits was denied. Finally, the court awarded plaintiff counsel fees and costs.
On appeal, defendant argues the court erred in its interpretation of the PSA. Related to this issue, defendant asserts the order grants plaintiff a greater share of his pension than she is entitled to receive as a matter of law, because it awarded her accretions attributable solely to his post-divorce work efforts. Defendant also cites as error the manner in which the motion judge fixed the tax offset and the award of counsel fees and costs.
It is well established that matrimonial agreements are basically contractual in nature. Pacifico v. Pacifico, 190 N.J. 258, 265 (2007). Although we are obliged to defer to the factual findings and discretionary decisions made by the Family Part due to the specialized nature of the court, Cesare v. Cesare, 154 N.J. 394, 413 (1998), a question regarding the interpretation or construction of a contract is a legal one and our review is plenary, with no special deference to the trial judge's interpretation of the law and the legal consequences that flow from the established facts. Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009); Manalapan Realty L.P. v. Twp. of Manalapan, 140 N.J. 366, 378 (1995).
In interpreting a contract we are guided by established principles. "A basic principle of contract interpretation is to read the document as a whole in a fair and common sense manner." Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009). "We do not supply terms to contracts that are plain and unambiguous, nor do we make a better contract for either of the parties than the one which the parties themselves have created." Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007); Graziano v. Grant, 326 N.J. Super. 328, 342 (App. Div. 1999).
So too, we enforce the contract as written. Pacifico, supra, 190 N.J. at 266 (internal citations omitted). The parties are bound by the contracts they make for themselves, with the understanding that "a meeting of the minds is an essential element to the valid consummation" of any agreement. Center 48 Ltd. P'ship v. May Dept. Stores Co., 355 N.J. Super. 390, 406 (App. Div. 2002). Accordingly, in interpreting an agreement, we "must try to ascertain the intention of the parties as revealed by the language used, the situation of the parties, the attendant circumstances, and the objects the parties were striving to attain." Celanese Ltd. v. Essex County Imp. Authority, 404 N.J. Super. 514, 528 (App. Div. 2009) (citing Onderdonk v. Presbyterian Homes of N.J., 85 N.J. 171, 183-84 (1981)).
In our examination, if we find "the terms . . . are clear and unambiguous, there is no room for construction and the court must enforce those terms as written," Watson v. City of E. Orange, 175 N.J. 442, 447 (2003), giving them "their plain, ordinary meaning." Pizzullo v. New Jersey Mfrs. Ins. Co., 196 N.J. 251, 270 (2008). See also Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001). However, "[i]f the terms of the contract are susceptible to at least two reasonable alternative interpretations, an ambiguity exists. In that case, a court may look to extrinsic evidence as an aid to interpretation." Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (internal citations omitted).
Our review of the questions presented on appeal is also informed by the legal principles governing the equitable distribution of marital assets. We set forth these general guideposts, along with the specific provisions governing the equitable distribution of pension assets.
Prior to ordering the division of an asset, the court must identify whether the asset is subject to equitable distribution. Rothman v. Rothman, 65 N.J. 219, 232 (1974). In general, the court divides only that portion of the asset that was "legally or beneficially acquired" during a marriage. N.J.S.A. 2A:34-23(h). It is well-settled that a ...