On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Ocean County, Docket No. FM-15-1152-98.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 13, 2010
Before Judges Sabatino and Alvarez.
In this post-judgment matrimonial matter, defendant William N. Phillips appeals the Family Part's order dated July 17, 2009, insofar as paragraph six of that order requires the full amount of defendant's pension income to be applied to alimony arrears owed to defendant's former wife, plaintiff Diana J. Phillips. Defendant also appeals the Family Part's denials of his ensuing motions for reconsideration.
Because the Family Part's order is contrary to statutory garnishment limitations, and because the record is inadequate to justify the post-judgment treatment of defendant's pension as an asset in equitable distribution, we vacate the court's directive and remand for the entry of a corrective order that adheres to the pertinent statutory limits.
From the limited record supplied to us by the pro se appellant, it appears that the parties were divorced on May 26, 2000. As part of the terms of the divorce,*fn1 defendant was apparently obligated to pay weekly alimony to plaintiff. Defendant subsequently remarried and relocated to South Carolina, where he resides with his present wife and three younger children. According to defendant's submissions, he retired from his employment in March 2008 and his sole present income is from Social Security retirement earnings and his former employer's pension plan.
By defendant's own admission, he failed to keep the alimony payments current, resulting in substantial arrears, which were tabulated by the Family Part at $17,332.00 as of July 31, 2009. As defendant's arrears mounted, plaintiff sought relief in the Family Part to enforce her rights of collection. She argued, among other things, that defendant had voluntarily caused his own financial constraints by transferring substantial assets to his present wife and by choosing to retire. Meanwhile, defendant moved, unsuccessfully, to reduce his alimony obligations, based upon an alleged change in circumstances.*fn2
Following the motion practice, the Family Part issued the subject order dated July 17, 2009. Paragraph six of that order recites that "[e]ffective immediately, one hundred (100%) percent of [d]efendant's net monthly pension benefit with [his former employer], shall be allocated to [p]laintiff via a Qualified Domestic Relations Order ["QDRO"], to be utilized towards his ongoing alimony obligation, with the cost of the QDRO to be the sole responsibility of [d]efendant."
Defendant sought reconsideration of this provision, arguing that, in effect, the court was ordering a garnishment of the full amount of his pension income, despite the fact that federal and State statutes limit such garnishment at fifty percent for a person who is supporting a spouse or dependent children. In his initial oral ruling denying reconsideration, the Family Part judge characterized the pension as an asset subject to distribution. After a further submission by defendant, the judge again denied reconsideration in an order dated December 10, 2009.
The applicable federal statute defines earnings subject to the federal garnishment limitations to include "periodic payments pursuant to a pension or retirement program." 15 U.S.C.A. § 1672(a). The statute further defines disposable earnings as "that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld." § 1672(b). Furthermore, § 1673(b)(2) prescribes that:
The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not exceed--
(A) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), 50 per centum of such individual's disposable earnings for that week; and
(B) where such individual is not supporting such a spouse or dependent child described in clause (A), 60 per centum of such individual's disposable earnings for that week; except that, with respect to the disposable earnings of any individual for any workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per centum and the 60 per centum specified in clause (B) shall be deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order ...