Conway, M. v. Conway, J. v. City of Erie Police ( 2019 )

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2019 PA Super 138MICHAEL CONWAY : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
JULIE CONWAY :
:
Appellant :
:
v. :
:
CITY OF ERIE POLICE RELIEF AND :
PENSION ASSOCIATION :
:
Appellee No. 724 WDA 2018
Appeal from the Order May 8, 2018
In the Court of Common Pleas of Erie County
Domestic Relations at No(s): 13394-2009
BEFORE: GANTMAN, P.J.E., SHOGAN, J., and MURRAY, J.
OPINION BY GANTMAN, P.J.E.: FILED APRIL 30, 2019
Appellant, Julie Conway (“Wife”), appeals from the order entered in the
Erie County Court of Common Pleas, which denied her motion for entry of a
Qualified Domestic Relations Order (“QDRO”) reflecting the terms of her
Marital Settlement Agreement (“MSA”) with Appellee Michael Conway
(“Husband”). We reverse and remand with instructions.
The relevant facts and procedural history of this case are as follows.
Husband and Wife married on July 12, 1991 and separated in August 2007.
During their marriage, Husband was employed as a police officer for the City
of Erie. On July 28, 2009, Husband filed a complaint for divorce and equitable
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distribution. After lengthy negotiations, the parties executed their MSA on
August 19, 2016. The MSA stated, in relevant part:
RETIREMENT ASSETS AND PENSION PLAN
14. The parties agree to an equitable distribution of the
following assets as described:
Retirement Assets
a. HUSBAND is a participant in the City of Erie
Deferred Compensation Plan administered by VALIC. The
parties have agreed that HUSBAND will transfer to WIFE, by
Qualified Domestic Relations Order, the sum of Thirty
Thousand Dollars ($30,000.00) into a qualified account
which WIFE will designate. The draft Order will be prepared
by attorney for HUSBAND and approved by attorney for
WIFE.
b. HUSBAND, as a City of Erie police officer, is also a
participant in the Police Relief and Pension Association
Pension Plan. HUSBAND agrees that he will enter into a
Qualified Domestic Relations Order memorializing WIFE’s
entitlement to receive a share of his pension defined by the
coverture fraction upon his retirement consistent with the
terms recited in the Plan. The Qualified Domestic Relations
Order will be prepared by attorney for WIFE and approved
by attorney for HUSBAND. The parties have agreed that it
will include terms addressing a joint and survivor annuity,
and the apportionment of benefits between the parties in
the event of HUSBAND’s death or disability in connection
with his services as a police officer.
(MSA, dated 8/19/16, at 7-8; R.R. at A-10, A-11).
Significantly, at the time the parties executed their MSA, Husband’s
pension plan (“Plan”) contained a provision, stating: “[T]o the extent provided
under a ‘qualified domestic relations order,’ a former spouse of a Participant
shall be treated as the spouse or surviving spouse for all purposes under the
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Plan.” (Official City Ordinance No. 04-2011, Section 147.11(f)(2), at 36; R.R.
at A-54). On August 22, 2016, the court entered a divorce decree
incorporating the parties’ MSA. Effective August 23, 2016, four days after
Husband and Wife entered the MSA and one day after entry of their divorce
decree, the City amended the relevant provision of the Plan to read: “[A]
former spouse of a Participant shall not be treated as the spouse or surviving
spouse for any purposes under the Plan.” (Official City Ordinance No. 23-
2016, amendment to Section 147.11(f)(2), at 2; R.R. at A-59).
On August 29, 2016, Wife submitted a proposed QDRO to the Plan
administrator reflecting the terms of the parties’ MSA. Representatives of the
Plan subsequently denied Wife’s proposed QDRO, due to the amended City
ordinance. After numerous exchanges, Wife’s counsel and representatives of
the Plan could not agree on language of the QDRO. 1 Consequently, on
December 1, 2017, Wife filed a motion for entry of a QDRO reflecting the
terms of her MSA with Husband.
The court held a hearing on Wife’s motion on April 3, 2018. Following
the submission of post-hearing briefs, the court denied Wife’s motion on May
8, 2018, stating:
It is undisputed that [Wife’s] counsel forwarded the parties’
QDRO to the Police Pension Association subsequent to the
amendment to Section 147.11(f)(2) of the City of Erie
____________________________________________
1Wife filed a motion on September 11, 2017, to join Appellee, the City of Erie
Police Relief and Pension Association (“Association”), as an additional
defendant in this matter. The court granted Wife’s motion that day.
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Codified Ordinance, which eliminated the prior provision
that treated a former spouse of a participant as a spouse or
surviving spouse. As the amended section took effect prior
to the Association’s receipt of the QDRO, [Wife’s] QDRO is
not enforceable as written and [Wife’s] Motion must be
denied.
(Order, filed May 8, 2018). In essence, the court decided the operative date
for any QDRO was the date the Association received the proposed QDRO.
Wife timely filed a notice of appeal on May 18, 2018.2 That day, the
court ordered Wife to file a concise statement of errors complained of on
appeal pursuant to Pa.R.A.P. 1925(b), which Wife timely filed on May 31,
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2 No party formally objects to this Court’s jurisdiction over the appeal, but the
Association “questions” whether the appeal should be in the Commonwealth
Court because the Association is a state agency and the case involves a city
ordinance. See 42 Pa.C.S.A. § 762 (discussing appeals within
Commonwealth’s exclusive jurisdiction). Wife’s issue on appeal asks us to
decide the operative date for the QDRO. This case does not involve the
Association’s rights or interpretation of the ordinance. The Association is
merely a tangential defendant in these proceedings more in the nature of an
interpleader. Thus, we will retain jurisdiction over the appeal and decline to
transfer it to the Commonwealth Court. See Gordon v. Philadelphia
County Democratic Executive Committee, 80 A.3d 464 (Pa.Super. 2013)
(holding Superior Court had jurisdiction over appeal involving political party
executive committee election rule, where issue on appeal did not require
Superior Court to apply, interpret, or enforce Election Code; moreover,
appellees did not object to Superior Court’s jurisdiction and retaining
jurisdiction served judicial economy). See also 42 Pa.C.S.A. § 704(a)
(stating: “(a) General rule.−The failure of an appellee to file an objection to
the jurisdiction of an appellate court within such time as may be specified by
general rule, shall, unless the appellate court otherwise orders, operate to
perfect the appellate jurisdiction of such appellate court, notwithstanding any
provision of this title, or of any general rule adopted pursuant to section 503
(relating to reassignment of matters), vesting jurisdiction of such appeal in
another appellate court”).
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2018.3
Wife raises one issue for our review:
DID THE TRIAL COURT ERR BY FAILING TO ENTER THE
QUALIFIED DOMESTIC RELATIONS ORDER SUBMITTED BY
[WIFE] TO SECURE HER POST-DIVORCE RIGHTS TO
[HUSBAND’S] ERIE POLICE PENSION IN THAT THE MARITAL
SETTLEMENT AGREEMENT AND DIVORCE DECREE WERE
BOTH IN EFFECT PRIOR TO THE AMENDMENT OF THE CITY
POLICE PENSION ORDINANCE ELIMINATING CERTAIN
RIGHTS OF FORMER SPOUSES?
(Wife’s Brief at 4).
Our standard and scope of review in this case are as follows:
We review a trial court’s decision to grant [or deny] special
relief in divorce actions under an abuse of discretion
standard as follows:
Judicial discretion requires action in conformity with
law on facts and circumstances before the trial court
after hearing and consideration. Consequently, the
court abuses its discretion if, in resolving the issue for
decision, it misapplies the law or exercises its
discretion in a manner lacking reason. Similarly, the
trial court abuses its discretion if it does not follow
legal procedure.
An abuse of discretion exists when the trial court has
rendered a decision or a judgment which is manifestly
unreasonable, arbitrary, or capricious, has failed to apply
the law, or was motivated by partiality, prejudice, bias or ill
will.
However, our deference is not uncritical. An order
may represent an abuse of discretion if it misapplies
the law. It is therefore our responsibility to be sure
that in entering its order the…court correctly applied
____________________________________________
3 On August 11, 2018, Husband died while on duty. Husband’s estate has not
filed a brief in this matter.
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the law. An order may also represent an abuse of
discretion if it reaches a manifestly unreasonable
result. This will be the case if the order is not
supported by competent evidence. It is therefore also
our responsibility to examine the evidence received by
the…court to be sure that the…court’s findings are
supported by the evidence. Although we will accept
and indeed regard ourselves as bound by the…court’s
appraisal of a witness’ credibility, we are not obliged
to accept a finding that is not supported by the
evidence.
When reviewing questions of law, our scope of review is
plenary.
Prol v. Prol, 935 A.2d 547, 551-52 (Pa.Super. 2007) (internal citations and
quotation marks omitted).
Wife argues the parties’ MSA and divorce decree secured her rights to
share in Husband’s pension benefits. Wife asserts the parties intended for
Wife to receive the benefits of a spouse or surviving spouse, as set forth in
the Plan, when Husband and Wife entered into the MSA. Wife contends the
controlling date in this matter is the date the parties entered into the MSA,
which occurred prior to the effective date of the amendment to the City
ordinance. Wife emphasizes the MSA settled her marital rights to share in
Husband’s benefits; the QDRO is the vehicle to recognize and to implement
those rights through a method of payment. Wife contends the Association’s
denial of her proposed QDRO constitutes an unlawful ex post facto application
of the amended ordinance. Wife insists entry of the MSA as incorporated in
the divorce decree serves as an enforceable court order, so the Association
has no authority to invoke the later amended ordinance as a defense for
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denial. Wife claims the parties had no obligation to consult with or receive
approval from the Association as a prerequisite to her rights under the city
ordinance. Wife submits she is simply asking the Association to honor the
ordinance in effect when the parties entered into the MSA. Wife concludes the
court improperly denied her motion for special relief, in the form of a QDRO
reflecting and enforcing the terms of the parties’ MSA that predated the
amendment to the ordinance, and this Court must reverse. We agree.
To begin:
In Pennsylvania, we enforce property settlement
agreements between husband and wife in accordance
with the same rules applying to contract
interpretation. A court may construe or interpret a
[marital settlement agreement] as it would a contract,
but it has neither the power nor the authority to
modify or vary the [agreement] unless there has been
fraud, accident or mistake.
It is well-established that the paramount goal of
contract interpretation is to ascertain and give effect
to the parties’ intent. When the trier of fact has
determined the intent of the parties to a contract, an
appellate court will defer to that determination if it is
supported by the evidence.
Further, where…the words of a contract are clear and
unambiguous, the intent of the parties is to be ascertained
from the express language of the agreement itself.
Bianchi v. Bianchi, 859 A.2d 511, 515 (Pa.Super. 2004) (internal citations
and quotation marks omitted).
A QDRO is an order “which creates or recognizes the rights of an
alternate payee to receive all or a portion of the benefits payable to a
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participant under [a pension] plan. To be ‘qualified,’ the order must contain
certain required information and may not alter the amount or form of plan
benefits.” Smith v. Smith, 595 Pa. 80, 85 n.3, 938 A.2d 246, 248 n.3 (2007)
(emphasis added). In cases where parties have entered a marital settlement
agreement, a QDRO merely implements substantive rights already created by
the settlement agreement. Grieve v. Mankey, 679 A.2d 814 (Pa.Super.
1996), appeal denied, 546 Pa. 681, 686 A.2d 1311 (1996) (holding order
directing QDRO did not affect either party’s substantive rights but was simply
procedural mechanism to effectuate pension entitlement as agreed to by
parties).
Additionally, “[a]n avowed objective of the Divorce Code is to effectuate
economic justice between the parties who are divorced and insure a fair and
just determination and settlement of their property rights.” Prol, supra at
553 (reversing trial court’s decision that wife forfeited her marital share of
husband’s pension for failure to submit QDRO to husband’s counsel in timely
manner; drastic and severe measure of ordering forfeiture of wife’s marital
share of pension after 29 years of marriage is too harsh and does not serve
equity; remanding for reinstatement of wife’s interest in husband’s pension
pursuant to terms of equitable distribution of marital assets included in final
divorce decree). See also 23 Pa.C.S.A. § 3102(a)(6) (providing that it is the
policy of this Commonwealth to effectuate economic justice between divorced
parties).
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Instantly, the parties executed their MSA on August 19, 2016. The
record makes clear the parties intended for Wife to receive pension benefits
as a spouse or surviving spouse under the Plan. The former version of the
ordinance, in effect when the parties executed the MSA, permitted this
distribution. Moreover, nothing about the MSA was ambiguous concerning the
parties’ intent in this regard. See Bianchi, supra. Three days later, on
August 22, 2016, the court entered a divorce decree incorporating the parties’
MSA, also while the prior ordinance was still in effect. The amended ordinance
took effect the next day, on August 23, 2016. Wife submitted her proposed
QDRO to the Plan administrator on August 29, 2016. The Plan rejected the
proposed QDRO, based on the amended ordinance, and denied her any
benefits.
Notwithstanding the clear terms of the parties’ MSA and the divorce
decree, as well as the Plan distribution under the ordinance in effect at the
time of the MSA, the trial court inexplicably decided the date the Association
received Wife’s proposed QDRO controlled this matter. Yet, neither the trial
court nor the Association cite any law to support this position. Therefore, use
of the date the Association received Wife’s QDRO is completely arbitrary and
defeats Wife’s rights under the MSA, which existed prior to the amendment
to the ordinance. Wife’s proposed QDRO serves only to recognize and
implement her settled rights, secured under the MSA, which became an
enforceable court order upon entry of the divorce decree; the QDRO did not
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create new substantive rights.4 See Grieve, supra. Thus, we hold the
controlling date in this matter is the date the parties entered the MSA, which
pre-dated the amendment to the ordinance. To hold otherwise would deny
Wife the benefit she bargained for and work an unfair and severe injustice
concerning the parties’ settlement of their existing rights. See Prol, supra.Further, the trial court’s order denying Wife her agreed-upon marital share of
Husband’s pension after 25 years of marriage is contrary to the goal of
achieving economic justice, particularly where Husband is now deceased and
the parties cannot renegotiate the MSA. See 23 Pa.C.S.A. § 3102(a)(6); Prol,
supra. Under these circumstances, the record does not support the trial
court’s decision to deny Wife’s requested relief. See id. Accordingly, we
reverse and remand for entry of a QDRO reflecting the terms of the parties’
MSA.
Order reversed; case remanded with instructions. Jurisdiction is
relinquished.
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4 The Association’s reliance on Maloney v. Maloney, 754 A.2d 36(Pa.Cmwlth. 2000), appeal denied, 565 Pa. 678, 775 A.2d 810 (2001), is
misplaced. In that case, the Commonwealth Court reversed a trial court’s
order directing the Borough of Yeadon to pay survivor benefits to an ex-spouse
when survivor benefits were not provided for in the relevant ordinance and
not previously contracted for by the parties. Maloney is inapposite.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/30/2019
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