April 17, 2012
JOANNE REEVES, F/K/A KERMENDY, PLAINTIFF-RESPONDENT,
ALEXANDER KERMENDY, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FM-12-4209-74.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 21, 2011 -
Before Judges Waugh and St. John.
Defendant Alexander Kermendy appeals from three orders of the Family Part granting the application of plaintiff Joanne Reeves, his former wife, for execution and filing of qualified domestic relations orders (QDROs) to implement the provisions of their final judgment of divorce (JOD). We vacate one of the orders on appeal and remand for further proceedings consistent with this opinion.
We discern the following facts and procedural history from the record on appeal.
Reeves and Kermendy were married in 1972. They had a son, born in 1973. During their marriage, Kermendy was employed as an iron worker and participated in the Iron Workers Union's annuity and pension plans.
Reeves filed a complaint for divorce in 1974. The JOD setting forth the terms of the parties' oral property settlement agreement (PSA) was filed in 1975. Paragraph F of the JOD provided that Reeves shall be entitled to receive one-half of all contributions made by [Kermendy], his employer, or the Iron Workers Union to his pension and annuity plan, from October 8, 1972 until April 16, 1975. This Judgment shall serve as [Kermendy's] express authorization for [Reeves'] attorney to communicate with the Iron Workers Union or its agents who administer the funds to obtain [an] accounting of aforesaid contributions in [Kermendy's] account during the dates set forth herein. Upon receiving this information, [Reeves] shall be granted a lien against the annuity or retirement plan for one-half of said contributions. [Reeves] shall be entitled to these funds when [Kermendy] either draws any funds from the plan or has the right to withdraw any funds, whichever event occurs first.
Although Kermendy retired in July 2000, Reeves did not contact the administrator of the two plans to obtain an accounting of Kermendy's contributions during the applicable period until June 2010. Reeves asserts that the delay resulted from the fact that she did not learn that Kermendy had retired until that time. In July 2010, the administrator informed Reeves that "Kermendy's annuity contributions from October 8, 1972 through April 16, 1975 were $4,014.57. During this time Mr. Kermendy also earned 2.5 years of pension credit."*fn1
On March 16, 2011, Reeves filed a post judgment motion seeking the entry of two QDROs regarding Kermendy's pension and annuity plans. The pension plan QDRO required the plan administrator to pay "4.30% of [Kermendy's] total benefit" to Reeves until the earlier of the death of Reeves or Kermendy. The annuity plan QDRO required a lump sum payment to Reeves of "4.41% of [Kermendy's] total vested Account balance." It also required an additional payment to Reeves in the amount of $12,641.79 from Kermendy's share, which was to reimburse her for her share of the pension payments paid to Kermendy prior to the filing of the motion.
On March 28, Kermendy filed a cross-motion in which he challenged Reeves' right to QDROs, as well as the amounts they would allocate to Reeves. He argued that the JOD required nothing more than payment of one half of his contributions to the plans during the marriage. He denied withholding the fact of his retirement from Reeves, asserting that they had not had contact with each other in twenty years. Finally, he pointed to the fact that the law authorizing QDROs was not enacted until well after entry of the JOD.*fn2
The motion judge reserved decision following oral argument on April 15. She issued a written opinion and order on May 9, granting Reeves' motion and denying Kermendy's cross-motion. Both QDROs were filed by the judge. On June 24, the trial court entered a consent order staying the QDROs. This appeal followed.
On appeal, Kermendy argues that the motion judge failed to implement the clear language of the JOD, but rather gave Reeves the benefit of a remedy, QDROs, that was not available and could not have been intended by the parties at the time of the divorce. He also contends that the judge erroneously concluded that entry of a QDRO was the only way to implement the JOD.
We ordinarily accord great deference to the discretionary decisions of Family Part judges. Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009) (citing Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006)). Nevertheless, a judge's purely legal decisions are subject to our plenary review. Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div. 2007); Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 495 (App. Div.), certif. denied, 177 N.J. 224 (2003).
In a long line of decisions, our Supreme Court has "emphasized repeatedly that matrimonial agreements between spouses relating to [equitable distribution], alimony and support, which are fair and just, fall within the category of contracts enforceable in equity." Petersen v. Petersen, 85 N.J. 638, 642 (1981) (citing Carlsen v. Carlsen, 72 N.J. 363, 370-71 (1977); Berkowitz v. Berkowitz, 55 N.J. 564, 569 (1970); Schlemm v. Schlemm, 31 N.J. 557, 581-82 (1960)).
As we held in Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995) (citing Capanear v. Salzano, 222 N.J. Super. 403, 407 (App. Div. 1988)), "the contractual nature of such agreements has long been recognized and principles of contract interpretation have been invoked particularly to define the terms of the agreement and divine the intent of the parties."
As the Supreme Court held in Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (citing Tessmar v. Grosner, 23 N.J. 193, 201 (1957)), "it is a basic rule of contractual interpretation that a court must discern and implement the common intention of the parties." Our "role is to consider what is written in the context of the circumstances at the time of drafting and to apply a rational meaning in keeping with the 'expressed general purpose.'" Ibid. (citations omitted). We "will not draft a new agreement for the parties." Massar, supra, 279 N.J. Super. at 93 (citing Aarvig v. Aarvig, 248 N.J. Super. 181, 185 (Ch. Div. 1991)). Nevertheless, "the law affords particular leniency to agreements made in the domestic arena and similarly allows judges greater discretion when interpreting these agreements." Ibid. (citing Guglielmo v. Guglielmo, 253 N.J. Super. 531, 542 (App. Div. 1992)). Any marital agreement that is unconscionable or is the product of fraud or overreaching may be set aside.*fn3 Guglielmo, supra, 253 N.J. Super. at 541; Capanear, supra, 222 N.J. Super. at 407. "Marital property settlement agreements 'involve far more than economic factors' and must serve the strong public and statutory purpose of ensuring fairness and equity in the dissolution of marriages." Conforti v. Guliadis, 128 N.J. 318, 323 (1992) (quoting Rothman v. Rothman, 65 N.J. 219, 229 (1974)). "Even when a divorce order incorporates agreements reached privately between the parties, such orders can be modified 'in light of all the facts' bearing on what is 'equitable and fair.'" Ibid. (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)).
With that outline of the applicable law, we turn to the language of the JOD. It states, in its relevant part, that Reeves "shall be entitled to receive one-half of all contributions made by [Kermendy], his employer, or the Iron Workers Union to his pension and annuity plan[s], from October 8, 1972 until April 16, 1975." It then gives her the right to obtain an accounting of the amounts mentioned, a lien on them, and the right to receive them as soon as Kermendy has the ability to access them.
A literal interpretation of the language used in the PSA comports with Kermendy's interpretation. There is no specific mention of a right to participate in the benefits of either plan, other than the right to receive one half of the contributions made during the marriage. Cf. Reinbold v. Reinbold, 311 N.J. Super. 460, 462 (App. Div. 1998) ("The Wife shall receive 50% of all of the benefits the Husband acquired in this pension from the date of marriage to the date of the complaint . . . ."); Marx v. Marx, 265 N.J. Super. 418 (Ch Div. 1993) (specifically mentioning a QDRO). Indeed, the literal language of the JOD suggests that Reeves would not even be entitled to interest, no matter how long the funds remained unavailable to her. In light of the inflation that has taken place since 1975, that would significantly decrease the value of her share of equitable distribution.
Because the motion judge interpreted the language of paragraph F as if it specifically called for a distribution of plan benefits rather than the contributions made to the plans, we cannot affirm her decision on the record before us. We find no factual or legal support for such an interpretation in the current record. Nevertheless, we are also not persuaded that the literal, and indeed harsh, reading of the PSA espoused by Kermendy is consistent with the intent of the parties or, if it is, that the terms of the PSA in that regard were equitable under the circumstances.
For that reason, we vacate the order granting Reeves' motion and remand to the Family Part for a plenary hearing, at which the intent of the parties and the overall fairness of Paragraph F can be developed. The judge can then consider what was written in the context of the circumstances at the time of drafting, discern a rational meaning in keeping with the expressed general purpose, and explore the issue of unconscionability. In doing so, we do not hold that the relief granted by the motion judge or the interpretation espoused by Kermendy cannot be the appropriate result, but merely that neither is supported by the minimal record before us. In any event, the result may well be something different.
The QDROs shall remain stayed pending the result of the plenary hearing and the judge's determination of the appropriate remedy. The judge may amend or vacate the QDROs as necessary, depending upon the decision reached at that time.
Vacated in part and remanded.