August 31, 2011
LINDA C. D'ELIA, PLAINTIFF-RESPONDENT,
PETER E. D'ELIA, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-09752-89.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted July 19, 2011
Before Judges Sapp-Peterson and Ashrafi.
Defendant Peter D'Elia appeals from an order of the Family Part dated July 13, 2010, denying his motion for sanctions and other relief arising out of a mishandled Qualified Domestic Relations Order (QDRO) after his divorce, and also an August 27, 2010 order denying his motion for reconsideration. We affirm.
The parties were married on September 27, 1980. Plaintiff Linda D'Elia
filed a complaint for divorce on October 27, 1988. Peter*fn1
filed a counterclaim, and subsequently, the court entered a
Dual Judgment of Divorce on January 16, 1990, which incorporated the
parties' settlement agreement. As part of equitable distribution of
marital property, the settlement agreement provided for equal
splitting of the pension benefits of each party that had accumulated
during the ninety-seven months of the marriage.
Each party's attorney prepared a QDRO*fn2 for the purpose of directing the pension plan administrator of the other party to preserve a portion of the pension benefits for distribution to the divorced spouse. The parties signed their consent to the two QDROs and the court issued the orders on January 16, 1990. Linda's attorney served her QDRO upon the pension administrator at Peter's place of employment, the Cozzoli Machine Company. The record does not show, however, that Peter's attorney served his QDRO upon the pension plan administrator at Linda's place of employment, Summit Federal Savings & Loan Association (Summit Bank).
In October 1991, Linda "retired" at the age of forty-one after nineteen years of employment with Summit Bank. She planned to move to Florida and remarry. She inquired about her pension benefits and was given the option of deferring her pension until her normal retirement age in 2015, at which time she would receive $1,192.22 per month, or taking a lump sum payment immediately of $32,361.62. She chose the latter option. She deposited the payment into an Individual Retirement Account (IRA) to avoid adverse tax consequences. Between 1992 and 1998, Linda withdrew funds from her IRA and paid all penalties and taxes due because of the premature withdrawals.
In 2005, Peter consulted with his accountant for retirement planning and made inquiry of Summit Bank regarding his share of benefits from Linda's pension plan. In October 2005, Summit Bank responded that it no longer held any retirement assets of Linda, the settlement on the account having occurred in February 1992. Peter filed a motion before the Family Part to enforce his rights as a litigant. Linda did not respond to the motion, and the court entered an order on April 12, 2006, requiring that Linda provide information to Peter pertaining to her Summit Bank pension account.
When Linda received a copy of the court's order, she contacted Peter's attorney, initially stating in a handwritten note that she did not understand what was expected of her. Through further correspondence with Peter's attorney, Linda provided truthful information that she had received a payment of about $32,000 and rolled it over into an IRA and then withdrawn some of the money for her living expenses. She also said she had assumed Peter's share of her pension account was preserved or taken by him. She offered the balance of her IRA account, which she estimated at $8,000, as sufficient to cover Peter's entitlement to her pension benefits. Peter did not accept Linda's offer.
In 2006 and 2007, Peter's attorney received documents from Summit Bank evidencing Linda's pension options at the time of her retirement in 1991, her receipt of the lump sum payment, and her dates of employment. Peter filed another motion in the Family Part to enforce litigant's rights. Again, Linda did not file opposition. The court entered an order on September 7, 2007, directing Linda to comply with the April 12, 2006 order and restraining her from transferring her real or personal property, except for ordinary expenses, until all obligations owed to Peter were paid.
Upon receiving the September 2007 order, Linda consulted an attorney. Her attorney contacted Peter's attorney, provided copies of Linda's IRA account statements, and again offered to settle the matter by transferring to Peter the balance of the IRA account, which as of June 30, 2007, was $8,978.16. Linda's attorney received no response to the offer.
Two-and-a-half years later, in March 2010, Peter filed yet another motion to enforce litigant's rights. He sought an order sanctioning Linda $100 per day for allegedly failing to comply with the 2006 and 2007 orders and directing her to hire a pension professional at her sole expense to determine the amount due to Peter as his share of her pension benefits. Linda filed opposition and a cross-motion. In addition to explaining the history of the relevant events as described in this opinion, Linda offered again to provide the current balance of her IRA account, $9,333.18, in satisfaction of Peter's rights to her Summit Bank pension.
The Family Part heard argument on the motions on May 27, 2010. Counsel discussed at the argument what Peter's entitlement would have been in 1992 to a lump sum payment from Linda's pension account. The "coverture fraction" for determining the amount of the pension accumulated during the marriage would have used the 97 months of the marriage as the numerator and the 228 months that Linda was employed at Summit Bank as the denominator. The fraction equaled 42.5%. Since Peter was entitled to half the product of the lump sum payment of $32,362 multiplied by the coverture fraction, his share of that payment would have been $6,877. Peter's attorney acknowledged at the argument that the amount involved was too small to justify hiring experts to prepare reports and to testify at a court hearing. The judge of the Family Part instructed counsel to provide in writing their own calculations of what Peter's entitlement would be in June 2010. The judge's clerk called the attorneys about two weeks later to remind them that the court was waiting for their calculations before entering an order to dispose of the motions.
Counsel for Linda provided her calculations on Peter's entitlement. She explained that because Linda's pension was a direct benefit plan, the amount payable could only be determined at the time of Linda's retirement. There was no separate account in her name held by the Summit Bank pension plan administrator. Furthermore, Linda's exercise of her option for a lump sum payment could not be overridden by Peter in 1992. After determining his entitlement to $6,877 in February 1992, counsel calculated interest as paid by Linda's IRA account from 1998 forward, the time for which bank statements were available.
The accumulated interest would have increased Peter's share to $7,747 as of the end of 2009. Giving Peter the benefit of higher interest calculations, counsel suggested that the existing $9,333 in Linda's IRA account, minus taxes and penalties payable upon early withdrawal, would adequately cover any share to which Peter was entitled.
Peter's attorney did not provide any calculations to the court. The Family Part entered an order on July 9, 2010, later corrected for a clerical error by order dated July 13, 2010, which accepted Linda's calculations and ordered her to transfer the balance of her IRA account to Peter, after payment of taxes and penalties, in satisfaction of his rights under the Summit Bank QDRO. The order also denied Peter's request for sanctions and an expert pension evaluator at Linda's sole expense, and it denied each party's request for attorney's fees from the other.
Peter filed a motion for reconsideration, attaching a report prepared by Law Data, Inc., dated July 15, 2010. The report estimated Peter's entitlement to a portion of Linda's pension at $13,773.68. That figure was based on a present value of $64,756.38 for Linda's pension entitlement multiplied by the coverture fraction and divided in half. The court denied Peter's motion for reconsideration, stating that Peter and his attorney had all the essential information previously to provide their own calculation of his entitlement.
In his appeal before us, Peter argues that the Family Part erred in determining his pension entitlement without the aid of an expert evaluation, and without giving him time to provide his professional evaluation. He also argues that the court erred in failing to enforce the earlier 2006 and 2007 orders by imposing sanctions upon Linda for taking the entire lump sum payment and failing to account for Peter's share.
We reject these arguments because they are not borne out by the record we have set forth in detail. As to sanctions against Linda, the Family Part clearly did not abuse its discretion in denying Peter's request for monetary sanctions. Nothing in this record supports a finding that Linda intentionally or knowingly withdrew funds from her pension account that belonged to Peter. She had no responsibility for the absence of Peter's QDRO in the files of Summit Bank's plan administrator. In good faith, Linda believed that she was entitled to the lump sum payment of $32,361.62. When she first learned in 2006 that Peter's portion of her pension had not been preserved, she cooperated in giving true information about the disposition of the lump sum payment, and she reasonably offered the balance of her IRA account to Peter to satisfy his share. Subsequently, she continued to cooperate in providing information, and Peter's attorney had all the information available as of 2007 to determine a specific amount that would resolve the dispute.
Instead of acting on that information, Peter did nothing until 2010. Even at that time, Linda offered the entirety of the $9,333 in her IRA account, minus taxes and penalties, to reimburse Peter for his share of her pension benefit. Peter chose to litigate further, demanding that Linda pay all expenses of a pension evaluator although she was not at fault for the absence of Peter's QDRO from Summit Bank's file and although Peter's attorney acknowledged that the amounts involved did not justify hiring expert witnesses.
Also, despite the court's urging, Peter did not provide his own calculations until after the court had acted on the available information and entered its orders of July 9 and 13, 2010. There is nothing in the record to indicate that Peter's attorney engaged the services of Law Data, Inc. until after entry of the July 9 order, or more important, that he notified the court that he was awaiting a professional evaluation at his own expense.
Moreover, the evaluation prepared by Law Data, Inc. did not indicate that it recognized the limitations of the options available when Linda retired. Because as a defined benefit plan Linda's retirement benefits could only be determined at the time of her retirement in 1991, see Panetta v. Panetta, 370 N.J. Super. 486, 496 (App. Div. 2004) (citing with approval Marx v. Marx, 265 N.J. Super. 418, 421, 425 (Ch. Div. 1993)), certif. denied, 182 N.J. 427 (2005), and because Peter had no control by virtue of the QDRO over Linda's date of retirement, the calculations contained in the Law Data, Inc., report appear to overstate Peter's entitlement by placing a present value on what her retirement entitlement would be as of 2010.
On the other hand, the calculations offered by Linda's attorney were accurate in determining the portion of the lump sum payment to which Peter would have been entitled in February 1992, and reasonable in calculating interest at the same rate that Linda's IRA account added interest. We find no abuse of discretion or other error in the Family Part's determination that transfer of Linda's remaining IRA balance, after taxes and penalties, is a fair and just resolution of the dispute, which Linda had not caused.