Reis, G., III v. Reis, S. ( 2020 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GEORGE W. REIS, III : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
SUSAN M. REIS :
:
Appellant : No. 1879 MDA 2019
Appeal from the Order Entered October 28, 2019
In the Court of Common Pleas of Lebanon County Civil Division at No(s):
2011-21022
BEFORE: STABILE, J., DUBOW, J., and PELLEGRINI, J.*
MEMORANDUM BY DUBOW, J.: FILED: APRIL 30, 2020
Appellant, Susan M. Reis (“Wife”), appeals from the October 28, 2019
Order that denied her Petition to Enforce Divorce Decree, which requested
that the court direct the entry of an amended Qualified Domestic Relations
Order (“QDRO”)1 almost three years after the entry of the original QDRO.
Upon review, we agree with the trial court’s decision that it lacked jurisdiction
to amend the QDRO and, thus, we affirm.
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* Retired Senior Judge assigned to the Superior Court.
1 “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 participant under
[a retirement benefits 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, 938 A.2d 246, 248 (Pa. 2007) (citation and internal
quotation mark omitted).
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A detailed recitation of the procedural and factual history is unnecessary
to our disposition. Briefly, Wife and Appellee, George W. Reis, III
(“Husband”), were married on April 8, 1995 and separated on November 19,
2011. Relevant to this appeal, Husband was a member of the Sheet Metal
Worker’s Union Local 19 (“Union”) for thirty-five years, sixteen of those years
while married to Wife. Husband participated in the Union retirement plan,
which was comprised of a Sheet Metal Workers Annuity (“Annuity”), and a
Sheet Metal Workers Pension Fund (“Pension”). Pursuant to the Union’s “Rule
of 85,” when a Union member’s age and years of service equals or exceeds
the sum of 85, that individual is entitled to receive an unreduced early
retirement benefit.
Husband filed a Complaint in Divorce on December 5, 2011. On
February 23, 2016, after considering a Special Master’s Report and
Recommendations, and both parties’ Exceptions, the trial court entered a
Divorce Decree. The Decree, inter alia, awarded Wife 55% of the marital
estate, 55% of the marital portion of the value Husband’s Annuity and
Pension, and $800 in alimony per month until Wife is 62 years old.
On June 20, 2016, the parties entered a Stipulation where Husband
agreed to pay Wife an additional $60,000 above the court-ordered 55% from
his Annuity in exchange for Wife waiving her right to collect alimony.
Stipulation, filed 6/20/16, at ¶C(1)-(2). Also, both parties agreed to execute
a “revised” Annuity QDRO and Pension QDRO “simultaneously with their
execution of this Stipulation” and agreed that “[a]ll other provisions of the
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Special Master’s Report of December 9, 2015, and the Order and Decree of
February 23, 2016, shall remain in full force and effect.” Id. at (C)(1), (5).
On June 22, 2016, Wife filed motions requesting court approval of the
Annuity QDRO and the Pension QDRO, the latter of which is at issue in the
instant appeal. On the same day, the trial court approved and entered both
on the record.
The Pension QDRO, states, in relevant part:
7. Amount of Alternate Payee’s Benefit: This Order assigns to the
Alternate Payee 55.0% times the marital share fraction of the
Participant’s vested accrued benefit, as of the earlier of the
Alternate Payee’s benefit commencement date or the date the
Participant permanently ceases to accrue benefits under the
[Union Pension]. The numerator of the marital share fraction is
the number of months the Participant received credited service for
the purpose of computing benefits under the [Union Pension]
during the period of the marriage (April 8, 1995 through
November 19, 2011), and the denominator of which shall be the
Participant’s total number of months counted as credited service
for the purpose of computing benefits under the [Union Pension]
for the period ending on the earlier of the Alternate Payee’s benefit
commencement date or the date the Participant permanently
ceases to accrue benefits under the [Union Pension].
***
9. Actuarial Adjustments (“Separate Interest”): Any payments
made to the Alternate Payee under this Order will be actuarially
adjusted to take into account:
(a) the life expectancy of the Alternate Payee;
(b) the date on which the Alternate Payee commences
receiving benefits if it is prior to the Participant’s normal
retirement age (as defined under the [Union Pension]);
(c) the form of benefit selected by the Alternate Payee, if
applicable.
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** *
17. Continued Jurisdiction: The Court shall retain jurisdiction with
respect to this Order to the extent required to maintain the
original intent of the parties as stipulated herein.
Pension QDRO, 6/22/16.8
In September 2018, Husband retired ten years early and qualified for
an unreduced early retirement benefit from his Pension because he satisfied
the Union “Rule of 85” eligibility requirements; Husband was 55 years old and
a member of the Union for 35 years.
Prior to Husband’s retirement, in August 2018, Wife received
correspondence from the Union’s Pension Department advising that her
assigned monthly benefit was $1,044 as of Husband’s original retirement date,
September 2028, but that she would receive an actuarially reduced monthly
benefit of $547, if she elected to receive payments immediately. The
correspondence further explained that the Union Pension QDRO does not call
for awarding Wife a portion of any early retirement subsidy awarded to
Husband.
On March 15, 2019, Wife filed a Petition to Enforce Divorce Decree. In
the Petition, Wife averred that, pursuant to the Divorce Decree, she was
entitled to 55% of Husband’s early retirement subsidy and requested that the
trial court direct the entry of an Amended QDRO to allow her to share in
Husband’s early retirement subsidy.
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On May 29, 2019, the trial court held a hearing on the Petition. Wife
did not present any witnesses, but submitted various exhibits, including: the
Special Master Report; Divorce Decree; June 20, 2016 Order and Stipulation
regarding Wife’s waiver of alimony in exchange for $60,000; the Union
Pension QDRO; and the August 16, 2018 letter from the Pension Actuary to
Wife.
Husband testified on his own behalf, and called numerous witnesses,
including: Johnathan Cramer, the actuary who prepared the Union Pension
QDRO; Elizabeth Schlax, Esq., co-counsel for the Pension Fund; Michael Reilly,
the actuary who calculated Wife’s benefits; Thomas Klingenberg, the Pension
Fund Administrator.
In sum, Husband testified that Wife was aware of the “Rule of 85” and
it was an available retirement plan option the entire time he was married to
Wife. N.T. Hearing, 5/29/19, at 13.
Mr. Cramer testified that the parties jointly retained him to prepare the
Pension QDRO, the “Rule of 85” was an option under Husband’s retirement
plan at the time he prepared the QDRO, neither party requested him to include
language regarding Wife sharing in an early retirement supplement, and both
parties, and their attorneys, had an opportunity to review the QDRO and make
revisions. Id. at 16-17. Mr. Cramer explained that if Wife elected to receive
her payments early, she would be receiving a lower monthly amount over a
longer period, and “the actuarial value of the smaller benefit paid over a longer
period is actuarially equivalent to a higher amount of monthly pension paid at
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a later point.” Id. at 18-19. Mr. Cramer stated that Husband, who elected to
receive his payments early, was not receiving an actuarial reduction because
of the “Rule of 85.” Id. at 19. Finally, counsel pointed out that paragraph 7
of the QDRO awarded Wife 55% of the marital share fraction of the
Participant’s “vested accrued benefit” and asked Mr. Cramer to define that
term. Mr. Cramer responded that “the term vested accrued benefit . . . would
include the participant’s retirement benefits under the plan whether they retire
at normal retirement age or whether they retire early and receive either a
reduced or unreduced early retirement benefit.” Id. at 23.
Attorney Schlax confirmed that the “Rule of 85” provision had been a
Union retirement option since 1997, was in effect at the time of the parties’
separation in 2011, and did not change after the parties divorced in 2016.
Id. at 29-30. Attorney Schlax testified she advised the Pension Fund
Administrator that paragraph 9 of the QDRO clearly states that the amount
awarded to Wife will be actuarially adjusted to take into account the date on
which Wife elects to take payments, and because the QDRO did not provide
for Wife to receive a share of an early retirement subsidy, the Pension Fund
could not assign or award such to Wife. Id. at 28, 31. She further explained
that if the parties had negotiated for Wife to receive a share of Husband’s
early retirement subsidy, they could have written that into the QDRO and the
Pension Fund would comply with that term. Id. at 31.
Mr. Reilly testified that, hypothetically, if Wife elected to take early
payments and the Pension Fund did not actuarially reduce them, Wife would
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receive more than the 55% than the court awarded her. Id. at 40-41. Mr.
Klingengerg testified that Husband is currently receiving Pension payments
and Wife has not yet chosen whether to begin payments now or wait until
Husband’s original retirement date. Id. at 45-46.
On October 25, 2019, the trial court issued an Order and Opinion
denying Wife’s Petition to Enforce Divorce Decree because the court lacked
jurisdiction to order the modification of the Pension QDRO more than 30 days
after entry of the QDRO.
Wife timely appealed. Both Wife and the trial court complied with
Pa.R.A.P. 1925.
Wife raises the following issue on appeal: “Whether the [trial court]
erred when it did not permit amendment of the [QDRO] to comport with the
Special Master’s Recommendations and the Divorce Decree.” Wife’s Br. at 5.
This Court reviews a trial court’s decision to grant or deny special relief
in divorce actions for an abuse of discretion. Conway v. Conway, 209 A.3d
367, 371 (Pa. Super. 2019). “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.” Id. (citation omitted). It is this Court’s
responsibility to ensure that the evidence supports the trial court’s findings.
Prol v. Prol, 935 A.2d 547, 551–52 (Pa. Super. 2007). “Although we will
accept and indeed regard ourselves as bound by the [trial] court’s appraisal
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of a witness’ credibility, we are not obliged to accept a finding that is not
supported by the evidence.” Id. (citation omitted).
In her sole issue, Wife avers that the trial court erred when it did not
permit amendment of the Pension QDRO to comport with the Special Master’s
Recommendations and the Divorce Decree, which awarded her 55% of
Husband’s Pension. Wife’s Br. at 10-11. In her Brief, Wife acknowledges that
pursuant to 42 Pa.C.S. § 5505, a trial court generally loses jurisdiction to
modify its orders after 30 days. Id. at 11-12. However, Wife argues that a
trial court has the authority to modify an order upon a showing of “a fatal
defect apparent on the face of the record or some other evidence of
extraordinary cause justifying intervention by the court.” Id. at 12 (quoting
Zehner v. Zehner, 195 A.3d 574, 579-80 (Pa. Super. 2018). Wife asserts
that the “effect given to the terms of the current QDRO by the Pension
Administrators is clearly in contravention with the Special Master
Recommendation and Decree and rises to the level of a fatal defect on the
face of the record.” Id. at 10. We disagree.
A “trial court has broad discretion to modify or rescind a QDRO within
thirty days of the entry of the QDRO, but after thirty days the trial court may
reconsider a QDRO only if there is a showing of extrinsic fraud or other
extraordinary cause.” Stockton v. Stockton, 698 A.2d 1334, 1337–38 (Pa.
Super. 1997); 42 Pa.C.S. § 5505. “[E]xtraordinary circumstances exist in
limited circumstances.” Hayward v. Hayward, 808 A.2d 232, 236 (Pa.
Super. 2002). For instance, the parties’ mutual mistake, misunderstanding
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about the terms of the agreement, or dissatisfaction with counsel does not
empower the lower court to modify the QDRO. Stockton, 698 A.2d at 1338.
However, extraordinary circumstances do exist where there is a fatal defect
apparent on the face of the record. Hayward, 808 A.2d at 236.
Instantly, the trial court agreed with Wife’s assertion that the Pension
QDRO is inconsistent with the Special Master’s Recommendation and the
Divorce Decree. In its Opinion, the trial court made findings that 1) Husband’s
early retirement subsidy is part of the marital estate; 2) Wife is entitled to
55% of Husband’s pension with no qualifications or limitations; 3) Wife “should
have been entitled” to a share of Husband’s early retirement subsidy as
determined by application of the coverture fraction.2 Trial Ct. Op., 10/25/19,
at 17.
Despite these findings, the trial court concluded that Wife failed to prove
“extrinsic fraud or extraordinary circumstances which would warrant
amendment in the case before us” because Wife was aware of the “Rule of
85,” reviewed the Pension QDRO but did not request any amendments prior
to filing, and included language in the QDRO that is was the parties intent to
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2 “A coverture fraction is used to calculate the marital portion of a pension
plan: the denominator of the coverture fraction is the number of months the
employee spouse worked to earn the pension benefit and the numerator is the
number of such months accrued during the marriage prior to final separation.”
Conner v. Conner, 217 A.3d 301, 317n.7 (Pa. Super. 2019) (citing 23
Pa.C.S. § 3501(c))
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accept the terms of the QDRO without regard to any other document. Id. at
19-22. The trial court opined:
Here, there is no dispute that Wife was aware of the “Rule of 85”
provision of Husband’s pension plan during the marriage. Both
parties were represented by counsel at all times and had ample
opportunity to review the terms of the QDRO and request that any
changes be made. If Wife had objected to the inclusion of Section
9 or the absence of any provision regarding Husband’s potential
early retirement benefits or had noted that the terms of the QDRO
deviated from the award of benefits provided by the Divorce
Decree, she could have raised the issue prior to its entry as a
[c]ourt Order. Instead, Wife requested no substantive changes,
signed the document, and it was approved by the [c]ourt upon
Wife’s own Motion.
Wife’s misunderstanding of the QDRO’s terms or failure to
consider the impact of Paragraph 9 on the benefit assigned to her
does not amount to extrinsic fraud or extenuating circumstances.
The fact that she may not have considered the effect of the
language of the QDRO on any benefits she might or might not
receive in the event Husband elected to take early retirement
under the “Rule of 85,” knowing of the existence of that option for
Husband, does not justify any change at this juncture.
Paragraph 17 of the QDRO provides that, “[t]he [c]ourt shall
retain jurisdiction with respect to this Order to the extent required
to maintain the original intent of the parties as stipulated
herein.” (Exhibit 4, emphasis added). Both parties signed the
QDRO, thus indicating their intent to accept the terms set forth in
the QDRO without regard to any other document.”
Id. at 19-22. Our review of the record reveals that the evidence supports the
trial court’s findings and the trial court did not misapply the law. Accordingly,
we find no abuse of discretion.
Wife cites Zehner, supra, and Hayward, supra, to support her
argument that because the Pension QDRO is inconsistent with the Special
Master’s Recommendation and the Divorce Decree, there is a fatal defect on
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the face of the record. Wife’s Br. at 12-17. However, Wife’s argument is
unavailing as both cases are easily distinguished from the instant case.
In both Zehner and Hayward, this Court held the trial court had
jurisdiction to modify a QDRO more than thirty days after the trial court
entered the order because an incorrect coverture fraction was used, resulting
in the former spouse receiving a percentage of the entire pension rather than
a percentage of the marital portion of the pension. Zehner, 195 A.3d at 576,
581; Hayward, 808 A.2d at 236. In both cases, this Court held that the use
of an incorrect coverture fraction constituted extraordinary circumstances
because there was a fatal defect on the face of the record. Here, the parties
did not use an incorrect coverture fracture, but rather failed to address an
issue the parties were aware of at the time they executed the original QDRO.
Thus, this awareness and subsequent failure to address the issue does not
constitute an extraordinary circumstance and is not a fatal defect.
Accordingly, Wife’s reliance on Zehner and Hayward is misplaced and her
argument is unpersuasive.
In conclusion, the trial court did not abuse its discretion when it
concluded that it lacked jurisdiction to modify the Pension QDRO, and, thus,
we affirm the trial court’s Order denying Wife’s Petition for Special Relief.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 04/30/2020
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