JOANNA B. ORLOWSKI VS. ROBERT ORLOWSKI (FM-02-1778-14, BERGEN COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2969-16T4
JOANNA B. ORLOWSKI,
Plaintiff-Respondent/
Cross-Appellant,
APPROVED FOR PUBLICATION
v. May 7, 2019
ROBERT ORLOWSKI, APPELLATE DIVISION
Defendant-Appellant/
Cross-Respondent.
___________________________
Argued April 2, 2019 – Decided May 7, 2019
Before Judges Fisher, Hoffman and Geiger.
On appeal from Superior Court of New Jersey,
Chancery Division, Family Part, Bergen County,
Docket No. FM-02-1778-14.
Robert Orlowski, appellant/cross-respondent, argued
the cause pro se (Cores & Associates, LLC, attorney;
Amy S.Cores, on the briefs).
Stephen H. Roth argued the cause for respondent/cross-
appellant.
The opinion of the court was delivered by
GEIGER, J.A.D.
In this post-judgment matrimonial appeal, we consider whether a court
may compel reimbursement of college tuition, forensic accountant's fees, and
counsel fees, through an enhanced wage garnishment and a Qualified Domestic
Relations Order (QDRO) against the obligor's individual annuity account funds
on deposit in an annuity governed by the Employee Retirement Income Security
Act of 1974 (ERISA), 29 U.S.C. §§ 1001 to 1461. We hold that unpaid awards
for counsel fees and expert witness fees relating to child support, property
distribution, and college tuition reimbursement are enforceable by QDRO from
ERISA protected pension funds when an ex-spouse is the alternative payee of
the QDRO. We further hold the counsel fee judgments relating to child and
spousal support are enforceable through an enhanced wage garnishment.
I.
The complex procedural history underlying this appeal necessitates a brief
review of the proceedings that led to the arrearages owed to plaintiff Joanna B.
Orlowski, her enforcement efforts, and defendant Robert Orlowski's bad faith,
unclean hands, frivolous litigation in both state and federal court, and willful,
sustained failure to comply with court orders.
Before we discuss the pertinent facts and procedural history, we note
defendant appealed numerous orders and directed our attention to several
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alleged trial court errors. Defendant's appeal, however, was dismissed for
failure to timely file a brief, so we do not consider those issues. Accordingly,
our review of the facts and procedural history is limited to those relevant to
plaintiff's cross-appeal.
Defendant is a member of the International Union of Operating Engineers
Local 14-14B (the Union). The Union administers a pension fund known as the
Annuity Fund of the International Union of Operating Engineers Local 14 -14B
(the Annuity). Defendant has substantial ERISA protected funds in his
individual annuity account (the annuity funds) with the Annuity.
The parties were married in May 1993 and had two sons. Plaintiff's 2014
divorce action was finalized in 2016. The amended final judgment of divorce
(amended judgment) required defendant to pay his child support obligations by
wage garnishment.
The amended judgment incorporated the parties' "partial" property
settlement agreement (PSA), which addressed the equitable distribution of
various marital assets, including the former marital residence and a 401(k)
investment account. The PSA also provided that plaintiff waived her claim for
alimony in exchange for a non-taxable lump sum payment of $120,000.
Notably, the PSA did not resolve equitable distribution of the annuity funds and
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plaintiff's IRA. The parties' mediator authored a supplemental letter to the PSA
that addressed certain child support and tax issues, and stated two issues
remained unresolved: (1) counsel fees; and (2) any claims or credits relating to
the fees incurred for the forensic accountant used to investigate the parties '
reciprocal claims of dissipation of marital assets.
In a written opinion, the trial court explained the forensic accountant 's
report demonstrated defendant could not account for $118,175 in marital funds.
On the other hand, the trial court found defendant did not demonstrate plaintiff
dissipated marital funds. As a result, plaintiff was successful in her dissipation
claim. The court reallocated responsibility for $5000 of the fees charged by the
forensic accountant from plaintiff to defendant for services related to
defendant's meritless dissipation claim.
As for counsel fees, the trial court recognized defendant's greater annual
income, assets, and lesser debt relative to plaintiff. It noted plaintiff moved
three times for enforcement of prior court orders and served sixteen subpoenas
to obtain discovery, which defendant obstructed. The court also stated the case
featured an "extensive litigious history" and plaintiff's dissipation claim was
successful, whereas defendant's was unsubstantiated.
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Based on these findings, the trial court awarded plaintiff: one-half of the
marital assets dissipated by defendant to be paid from defendant's annuity
account via a QDRO; $5000 as reimbursement for fees paid to the forensic
accountant due to defendant's meritless dissipation claim; and $48,194.98 for
counsel fees. Defendant was further ordered to pay $1150 to the mediator.
Thereafter, defendant refused to comply with the PSA and subsequent
court orders. His obstinance prompted plaintiff to move for enforcement in
April, May, September, and December of 2016. 1 All of plaintiff's enforcement
motions were granted, at least in part. Of note, on December 15, 2016, the tri al
court partially granted plaintiff's enforcement motion by: (1) entering judgment
against defendant in the amount of $5000 for failure to pay the forensic
accounting fee reimbursement; (2) imposing a wage execution to collect the
previously ordered and unpaid $48,194.98 in counsel fees; and (3) awarding
plaintiff attorney's fees incurred after March 31, 2016, relating to her
1
Remarkably, in the midst of the 2016 enforcement motion practice, defendant
advised the court he transferred all of his assets, including the marital residence
and annuity funds, to a self-executed trust. This precipitated the entry of a
supplemental QDRO to enforce, by rollover, the $119,500 equitable distribution
settlement owed to plaintiff pursuant to the PSA.
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enforcement motions and her successful defense of an order to show cause filed
by defendant, in an amount to be determined.
Defendant remained noncompliant. Plaintiff sought enforcement of the
prior orders, including payment of the previously awarded counsel fees, from
defendant's annuity funds through a QDRO. The trial court declined to enforce
the counsel fee arrearages "as alimony, by QDRO."
In March 2016, defendant filed two petitions with the United States
District Court for the District of New Jersey to remove the case to federal court.
On March 8 and 10, 2016, the District Court remanded the case to the Superior
Court sua sponte.
Defendant also filed a federal civil rights action against sixteen
defendants, including plaintiff, her attorney, the forensic accountant, the
mediator, Governor Christie, three Superior Court judges, and plaintiff 's former
attorney. The defendants named in the action moved to dismiss the complaint
with prejudice pursuant to Fed. R. Civ. P. 12(b)(6) and for sanctions. District
Court Judge Susan D. Wigenton dismissed the action with prejudice but denied
the application for sanctions.
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Incredibly, in May 2016, defendant filed yet another application for
removal, which the District Court denied. The District Court also prohibited
defendant from filing any additional pleadings without permission of the court.
On May 30, 2017, the trial court awarded plaintiff counsel fees of
$63,786.50 for the post-March 31, 2016 state court proceedings. The court
explained that plaintiff had to file several motions to enforce the terms of the
PSA. It recognized defendant acted in bad faith throughout the litigation by
engaging in efforts to prevent the enforcement of the amended judgment, PSA,
and subsequent orders. 2 The court also noted defendant earned a much higher
income than plaintiff and carried a balance of $395,334 in annuity funds.
Plaintiff moved to enforce litigant's rights and for sanctions due to
defendant's refusal to pay the $131,495.48 she seeks on appeal. The trial court
ordered defendant to pay his portion of the college tuition expenses but declined
to impose coercive sanctions. The trial court declined to impose an enhanced
wage garnishment to collect unpaid counsel fee awards and the forensic
2
In addition to dissipating and transferring marital assets to a trust, defendant
also routinely submitted baseless filings that generated otherwise unnecessary
counsel fees and delayed enforcement of plaintiff's rights. For example,
defendant filed meritless motions for recusal of the trial judge, to dismiss
plaintiff's applications for want of subject-matter jurisdiction, and for leave to
appeal.
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accountant fee reimbursement. Although the court stated on the record that an
enhanced wage garnishment would be established against defendant for th e
college tuition reimbursement, the order does not reflect that an enhanced wage
garnishment was ordered. The lump sum amount of $14,514 was added to
defendant's child support obligations, representing his college tuition
responsibility. A subsequent March 23, 2018 amended order provided
defendant's disposable earnings would be garnished at fifty-five percent
pursuant to 15 U.S.C. § 1673 and reiterated that the $14,514 college tuition
reimbursement was added to defendant's child support obligation. 3
Defendant's appeal, ultimately dismissed, and plaintiff's cross-appeal
followed. Plaintiff cross-appealed certain aspects of several orders. She argues:
(1) the trial court erred by not enforcing the counsel fee judgments and college
tuition award through a QDRO against defendant's annuity funds; and (2) the
trial court erred by not enforcing the counsel fee judgments by an enhanced wage
garnishment. Plaintiff contends that she will be unable to enforce the counsel
and expert fee awards absent a QDRO due to defendant's manipulation of his
3
15 U.S.C. § 1673(b)(2)(A) allows the court to garnish fifty-five percent of an
employee's disposable income, if the employee is supporting a child or spouse
and the wage garnishment is related to past due child support, spousal support,
or unpaid taxes.
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assets. She argues she is entitled to this remedy as a matter of equity to prevent
the injustice she would otherwise suffer.
II.
ERISA was enacted by Congress to protect employees and their
dependents who rely on retirement plans. Hawxhurst v. Hawxhurst, 318 N.J.
Super. 72, 82-83 (App. Div. 1998). The primary safeguard is ERISA's "broadly
worded preemption clause which establishes the regulation of pension plans 'as
exclusively a federal concern.'" Id. at 83 (quoting Alessi v. Raybestos-
Manhattan, Inc., 451 U.S. 504, 523 (1981)). ERISA also safeguards pension
funds through its "spendthrift" provision, which mandates each pension plan
contain an anti-alienation provision that prohibits the assignment or alienation
of pension benefits. 29 U.S.C. § 1056(d)(1). "Assignment or alienation" is
defined as "[a]ny direct or indirect arrangement . . . whereby a party acquires
from a participant or beneficiary a right or interest enforceable against the plan
in, or to, all or any part of the plan benefit payment which is, or may become,
payable to the participant or beneficiary." Hawxhurst, 318 N.J. Super. at 84
(alterations in original) (quoting 26 C.F.R. § 1.401(a)-13(c)(1)(ii)).
The anti-alienation provision reflects a policy "to safeguard a stream of
income for pensioners (and their dependents, who may be, and who usually are
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blameless) even if that decision prevents others from securing relief for wrongs
done them." Guidry v. Sheet Metal Workers Nat'l Pension Fund, 493 U.S. 365,
376 (1990) (emphasis added). In Guidry, the Court found it inappropriate "to
approve any generalized equitable exception . . . to ERISA's prohibition on the
assignment or alienation of pension benefits," even though the anti-alienation
provision can hinder the collection of a lawful debt. Ibid."The spendthrift provision is mandatory and contains only two
exceptions." Hawxhurst, 318 N.J. Super. at 84. The first exception allows
voluntary and revocable assignments of not more than ten percent of any benefit
payment. 29 U.S.C. § 1056(d)(2). The second exception was created when
Congress enacted the Retirement Equity Act of 1984, 98 P.L. 397, 98 Stat. 1433,
which permits payments from a plan pursuant to a QDRO. Guidry, 493 U.S. at376 n.18 (citing 29 U.S.C. § 1056(d)(3)). These exceptions are strictly
construed. Id. at 377.
A QDRO is a domestic relations order, "which creates or recognizes the
existence of an alternative payee's right to, or assigns to an alternative payee the
right to, receive all or a portion of the benefits payable with respect to a
participant under a plan." 29 U.S.C. § 1056(d)(3)(B); see also 26 U.S.C. §
414(p)(1). An "alternate payee" is defined as "any spouse, former spouse, child,
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or other dependent of a participant who is recognized by a domestic relations
order as having a right to receive all, or a portion of, the benefits payable under
a plan with respect to such participant." 29 U.S.C. § 1056(d)(3)(K); see also 26
U.S.C. § 414(p)(8). A domestic relations order is defined as:
any judgment, decree, or order (including approval of a
property settlement agreement), which relates to the
provision of child support, alimony payments, or
marital property rights to a spouse, former spouse,
child, or other dependent of a participant, and is made
pursuant to a State domestic relations law . . . .
[29 U.S.C. § 1056(d)(3)(B)(ii).]
Marital decrees that do not meet the statutory definition of a QDRO are
preempted by ERISA. Ross v. Ross, 308 N.J. Super. 132, 150 (App. Div. 1998).
When a marital decree qualifies as a QDRO, the anti-alienation provision does
not apply, 29 U.S.C. § 1056(d)(3)(A); Guidry, 493 U.S. at 376 n.18; Johnson v.
Johnson, 320 N.J. Super. 371, 381 (App. Div. 1999), and it is "exempt from
ERISA's preemption provision," Hawxhurst, 318 N.J. Super. at 84 n.1 (citing
Boggs v. Boggs, 520 U.S. 833, 846-47 (1997)).
Notably, our statutes and rules provide for the award of counsel fees in
family actions. N.J.S.A. 2A:34-23 (authorizing the award of counsel and expert
fees in divorce proceedings, either before or after a judgment of divorce is
entered); N.J.S.A. 2A:34-23a (requiring the defaulting party to pay the counsel
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fees incurred by the custodial party "in any action to enforce and collect child
support"); R. 4:42-9(a)(1) (authorizing counsel fee allowances in family
actions).
A.
We first address enforcement of the counsel fee and forensic accountant
awards through a QDRO. We are mindful of our decision in Johnson, which
held counsel fee awards were not enforceable against a pension plan through a
QDRO that violated the terms of the pension plan and was payable directly to
the attorney. 320 N.J. Super. at 382-83. The material facts in Johnson, however,
are distinguishable in several fundamental ways.
In Johnson, the annuity fund appealed from orders requiring it to pay the
attorneys' fees incurred by both parties in their divorce action. Id. at 374. We
found the proposed order did not qualify as a QDRO under ERISA for three
reasons. Id. at 382-83. First, the orders required payments directly to the
attorneys. "[A]ttorneys do not meet ERISA's definition of an 'alternate payee,'
defined as 'any spouse, former spouse, [or] child . . . recognized by a domestic
relations order as having a right to receive all, or a portion of, the benefits
payable under a plan with respect to such participant.'" Id. at 382 (quoting 29
U.S.C. § 1056(d)(3)(K)). Second, the orders related to payment of attorneys '
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fees "arising out of the dissolution of the Johnsons' marriage," rather than child
support, alimony, or equitable distribution as required by 29 U.S.C. §
1056(d)(3)(B)(i). Ibid. Third, requiring payment of attorneys' fees before
benefits payments began at age fifty-five or withdrawal from active employment
for at least six months, was a benefit not provided for under the annuity fund
plan, "and thus violate[d] 29 U.S.C. § 1056(d)(3)(D)(i)." Ibid. We therefore
concluded the "assignment violated the provisions of the Annuity Fund Plan and
29 U.S.C.A. § 1056(d)(3)(D)(i)." Id. at 383.
None of those disqualifying facts are present here. The alternate payee of
the proposed QDRO was defendant's former spouse, by rollover, not her attorney
or the forensic accountant. The attorney's fees related to enforcement of child
support and equitable distribution obligations, not dissolution of the marriage.
The forensic accountant fees related to investigation of defendant's meritless
marital asset dissipation claim. And the QDRO payments did not violate the
annuity plan, which permits transfers by rollover, as evidenced by the Annuity's
approval of the proposed QDRO. Under these starkly different circumstances,
the proposed QDRO violated neither ERISA nor our holding in Johnson. Entry
of the proposed QDRO to enforce the two fee awards is permissible under
ERISA's anti-alienation exception.
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Other courts have held QDROs may be used to enforce a counsel fee
award incurred in obtaining a child support order, Silverman v. Spiro, 784
N.E.2d 1, 7-9 (Mass. 2003); Adler v. Adler, 638 N.Y.S.2d 29 (N.Y. App. Div.
1996), or to enforce support arrears, Renner v. Blatte, 650 N.Y.S.2d 943, 946
(N.Y. Sup. Ct. 1996); In re Marriage of Olivarez, 232 Cal. Rptr. 794, 797-99
(Cal. Ct. App. 1986).
The Silverman court distinguished Johnson, noting the alternate payee
was the child's father, not the attorney. Silverman, 784 N.E.2d at 9 n.5. While
it recognized ERISA did not expressly permit the use of a QDRO to satisfy
counsel fee awards, the court nevertheless explained:
Necessarily implicit, however, in the Federal law's
recognition of a QDRO, is authorization for the
reimbursement of attorney's fees incurred in obtaining
a proper order. Were it otherwise, a former spouse or
party who succeeded in obtaining an appropriate
QDRO, would have the order reduced by the necessity
of paying attorney's fees. In some circumstances, a
former spouse or party might even forgo seeking a
needed QDRO because of the prohibitive nature of
unreimbursed attorney's fees. These results would
undermine the intent of Congress in establishing the
QDRO exception by denying deserving parties and
children a recovery to which they are entitled.
[Id. at 8.]
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We concur with this analysis. A fundamental maxim of equitable jurisprudence
is that "equity will not suffer a wrong without a remedy." Crane v. Bielski, 15
N.J. 342, 349 (1954). Plaintiff's court-ordered remedies will likely remain
unsatisfied absent enforcement by QDRO.
We further note the broad protections afforded to child support orders
when Congress enacted the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 (BAPCPA), 109 P.L. 8, 119 Stat. 23. BAPCPA amended
the Bankruptcy Code to clarify that a debt for a "domestic support obligation"
owed to, or recoverable by, a spouse, former spouse, or child of the debtor in
the nature of alimony, maintenance, or support of such spouse, former spo use,
or child, established by a separation agreement, divorce decree, property
settlement agreement, or court order is non-dischargeable. 11 U.S.C. §§
101(14A), 523(a)(5) and (a)(15). This exception to discharge has been
interpreted as applying to counsel fees incurred to obtain or enforce a domestic
support obligation. See, e.g., Reissig v. Gruber (In re Gruber), 436 B.R. 39, 43
(Bankr. N.D. Ohio 2010); In re Uzaldin, 418 B.R. 166 (Bankr. E.D. Va. 2009).
Thus, a court-ordered obligation to pay an ex-spouse's counsel fees in
matrimonial proceedings is a non-dischargeable domestic support obligation.
Court-ordered counsel fees incurred in post-divorce proceedings that are
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payable directly to the attorney are likewise non-dischargeable. Gruber, 436
B.R. at 44; accord Clair Griefer LLP v. Prensky (In re Prensky), 416 B.R. 406,
410-11 (Bankr. D.N.J. 2009).
Ordinarily, QDROs should be utilized to enforce counsel and expert fee
awards only when other assets sufficient to satisfy the awards either do not exist
or have been made unavailable by the obligor. We find that to be the case here.
For these reasons, we hold plaintiff was entitled to enforce the counsel
and expert fee awards through a QDRO naming her alternate payee. The trial
court failed to permit that relief.
B.
We next address the enforcement of the college tuition reimbursement
arrears through a QDRO naming plaintiff as alternate payee. For the following
reasons, we conclude the college tuition reimbursement arrears were enforceable
against defendant's annuity funds through a QDRO.
First, the trial court properly classified the college tuition payment as child
support. "[I]n appropriate circumstances, the privilege of parenthood carries
with it the duty to assure a necessary education for children." Newburgh v.
Arrigo, 88 N.J. 529, 543 (1982). "In this regard, college costs are recognized as
a form of support for unemancipated children." Ricci v. Ricci, 448 N.J. Super.
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546, 572 (App. Div. 2017). "The need and capacity of a child for higher
education are two of the many factors that a court must consider in determining
the amount of child support to order." Gac v. Gac, 186 N.J. 535, 542 (2006)
(citing N.J.S.A. 2A:34-23(a)(5)).
Enforcement of child support arrears by QDRO is allowable under
ERISA's anti-alienation exception. Second, both plaintiff and the child fall
within ERISA's definition of permissible alternate payee because plaintiff is a
former spouse and the child is defendant's son. Third, the payment of the college
tuition arrears does not violate the Annuity plan and the form of the proposed
QDRO was approved by the Annuity.
Therefore, entry of a QDRO in the amount of $14,514 payable to plaintiff
for college tuition reimbursement is permissible. It falls within the exception to
ERISA's anti-alienation provision since it is part of defendant's obligation to
support his son. It is also permissible as reimbursement to plaintiff for child
support payments, to the extent plaintiff was forced to make them on defendant's
behalf, because they "related to" defendant's child support obligation.
We hold plaintiff was entitled to enforce the college tuition
reimbursement arrearages through a QDRO naming her alternate payee. The
trial court failed to permit that relief.
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C.
Last, we address the enforcement of the counsel fee judgments by an
enhanced wage execution. Domestic support orders are enforceable through an
enhanced wage execution of fifty-five percent of the obligor's disposable income
pursuant to 15 U.S.C. § 1673(b) and N.J.S.A. 2A:17-56.9. See Burstein v.
Burstein, 182 N.J. Super. 586, 593-94 (App. Div. 1982) (holding orders for
support arrears that are reduced to judgment are enforceable by an enhanced
wage execution of fifty-five percent); see also Cashin v. Cashin, 186 N.J. Super.
183, 186 (Ch. Div. 1982) ("New Jersey courts have the authority to enforce
orders of support by garnishment of a defendant's wages at the rate of [fifty-five
percent] a week."). "Child support" is defined as including attorney's fees and
related costs. N.J.S.A. 2A:17-56.52. Therefore, child support judgments,
including attorney's fees awarded to establish or enforce child support
obligations, are enforceable through an enhanced wage garnishment of fifty-five
percent of defendant's disposable income as defined by 15 U.S.C. § 1672(b).
Cashin, 186 N.J. Super. at 187. To the extent the counsel fee judgments related
to enforcement of child support, they are enforceable through an enhanced wage
garnishment. The trial court failed to permit that relief.
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The same reasoning applies to spousal support judgments and attorney's
fees incurred to obtain or enforce spousal support. Id. at 186-88. To the extent
the counsel fee judgments related to enforcement of the lump sum to be paid in
lieu of alimony, they are enforceable through an enhanced wage garnishment.
The trial court also failed to permit that relief.
III.
In sum, we reverse the trial court orders denying entry of a QDRO payable
to plaintiff from defendant's ERISA protected annuity funds to enforce the
unpaid counsel fee, forensic accountant fee, and tuition reimbursement awards.
We also reverse the order denying enforcement of the counsel fee judgments by
an enhanced wage garnishment to the extent they related to child or spousal
support. We remand for further proceedings consistent with this opinion.
Reversed and remanded. We do not retain jurisdiction.
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