Prosper, P. v. Prosper, O. ( 2021 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
PATRICIA A. PROSPER : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
ORLANDO W. PROSPER :
:
Appellant : No. 562 WDA 2020
Appeal from the Order Entered April 16, 2020
In the Court of Common Pleas of Clearfield County
Civil Division at No(s): No. 2016-1970 C.D.
BEFORE: McLAUGHLIN, J., KING, J., and McCAFFERY, J.
MEMORANDUM BY KING, J.: FILED: August 17, 2021
Appellant, Orlando W. Prosper (“Husband”), appeals from the order
entered in the Clearfield County Court of Common Pleas, which disposed of
the petition for special relief filed by Appellee, Patricia A. Prosper (“Wife”). We
affirm.
The trial court set forth the relevant facts and procedural history of this
appeal as follows:
The parties were married on October 16, 1999 and
separated on or about May 1, 2016. Subsequently, Wife
filed a divorce complaint on December 8, 2016. In order to
resolve outstanding economic issues, a marriage settlement
agreement (hereafter “MSA”) dated July 25, 2019 was
executed by the parties. Said MSA was filed on July 29,
2019, and was incorporated in the divorce decree of the
[trial court], which was filed the same date.
The portion of the [MSA] at issue is Paragraph 12, which is
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identified as “Retirement Plans.”[1] Specifically, Paragraph
12 of the MSA provides that, in order to effectuate the
division of Husband’s pension, a qualified domestic relations
order (hereafter “QDRO”) was to be completed. Jonathan
Cramer, an actuarial consultant at Conrad Siegel, completed
a proposed QDRO that was forwarded to the parties’
attorneys for review. Upon receipt, Husband raised
objections to specific language of the proposed QDRO. As a
result of the ongoing disagreement over the language, Wife
filed the petition for special relief that is the subject of the
present opinion and order.
(Trial Court Opinion, filed April 16, 2020, at 1-2) (some internal capitalization
____________________________________________
1 The relevant portion of Paragraph 12 states:
Husband’s pension plan through the City of DuBois Police
Retirement plan shall be divided between the parties on a
50/50 basis as of May 1, 2016. Specifically, Wife shall
receive 50% multiplied by the marital coverture fraction of
the vested portion of Husband’s final pension benefit. The
vested pension benefit to be divided, and the coverture
fraction, shall be computed as of Husband’s date of
retirement. … Wife shall receive a proportionate share of
any post-retirement cost-of-living adjustments as well as a
pro-rata share of any early retirement benefits payable to
Husband in the event Husband retires prior to his normal
retirement date under the Plan.
Said division of the pension is to be completed within sixty
(60) days of the date of this Agreement by [QDRO] or such
other instrument as is directed by the Plan to accomplish
the division of said retirement. Should there be options to
be chosen by the plan regarding the manner of division,
both parties shall participate and have input into choosing
an option in order that each party receives their respective
share of the marital potion of the pension benefit.
* * *
(MSA, dated 7/25/19, at ¶12).
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omitted).
In her petition, Wife claimed that the language of the proposed QDRO
accurately reflected the parties’ agreement regarding the division of
Husband’s retirement benefits, despite Husband’s objections to the contrary.
Wife requested that the court rule on the disputed provisions of the QDRO to
facilitate the order’s completion. (See Wife’s Petition for Special Relief, filed
12/26/19, at ¶¶7-9). The court conducted a hearing on the matter on
February 14, 2020. At that time, Mr. Cramer testified that the proposed QDRO
reflected the language contained in the MSA. (See N.T. Hearing, 2/14/20, at
21).
Thereafter, Husband raised two specific objections to the proposed
QDRO: 1) it should not include language permitting Wife to receive a portion
of any lump sum payment that Husband would receive if he elected to
participate in a deferred retirement option program (“DROP”);2 and 2) it
should exclude a portion of Husband’s retirement benefits that would
represent monies not withheld from his pay as contributions to Social Security.
(See Trial Court Opinion at 4, 6; N.T. Hearing at 18-26). By opinion and order
filed April 16, 2020, the court determined that the terms of the MSA precluded
____________________________________________
2 At the February 14, 2020 hearing, Husband presented testimony from John
Suplizio, the city manager for the municipality where Husband worked as a
police officer. Mr. Suplizio testified that the city and police entered into a new
contract in July 2019, which provided DROP as a retirement benefit. (See
N.T. Hearing at 35).
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Husband from participating in DROP. The court also dismissed Husband’s
claim that the QDRO should include a Social Security set-off.
Husband timely filed a notice of appeal on May 15, 2020. On May 18,
2020, the court ordered Husband to file a Pa.R.A.P. 1925(b) concise statement
of errors complained of on appeal. Husband timely filed his Rule 1925(b)
statement on June 8, 2020.
Husband now raises two issues for our review:
Whether the [trial] court committed an error of law in
concluding that the language of [Paragraph] 12 of the [MSA]
was not ambiguous and operated to give Wife as alternative
payee a portion of Husband’s civil service retirement benefit
that was in lieu of a Social Security benefit?
Whether the [trial] court committed an error of law in
interpreting the language of [Paragraph] 12 of the [MSA] to
prohibit Husband from entering into the [DROP] offered by
the City of DuBois police retirement plan?
(Husband’s Brief at 7).
In his first issue, Husband asserts that the Divorce Code permits the
division of marital property only, and Social Security retirement benefits are
not marital property. Husband also acknowledges that he worked as a
member of the civil service system during the marriage and did not contribute
to Social Security, whereas Wife did contribute to Social Security through her
employment. Under these circumstances, Husband insists that a portion of
his retirement benefits, corresponding to a Social Security benefit, should be
exempt from consideration as marital property. Pursuant to Cornbleth v.
Cornbleth, 580 A.2d 369 (Pa.Super. 1990), appeal denied, 526 Pa. 648, 585
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A.2d 468 (1991), Husband maintains that “an individual who does not
contribute to the Social Security system is entitled to a reduction in his or her
pension equal to the present amount of a Social Security benefit because that
portion must be treated the same as a Social Security benefit which is
excluded by federal law as part of the marital estate.” (Id. at 30).
Although Paragraph 12 of the MSA awards Wife a portion of Husband’s
retirement benefits, Husband argues that the use of the words “marital
portion” in this paragraph clarified that “Wife is not entitled to receive any
portion of Husband’s retirement benefit that is non-marital and that portion of
Husband’s retirement that is in lieu of a Social Security benefit is non-marital.”
(Id. at 35). Further, Husband avers there is no language in the MSA indicating
that he waived his right to keep the non-marital portion of his retirement
benefits. Husband concludes the trial court erred in dismissing his request for
a Social Security set-off. We disagree.
“When interpreting a marital settlement agreement, the trial court is the
sole determiner of facts and absent an abuse of discretion, we will not usurp
the trial court’s fact-finding function.” Kraisinger v. Kraisinger, 928 A.2d
333, 339 (Pa.Super. 2007) (quoting Stamerro v. Stamerro, 889 A.2d 1251,
1257 (Pa.Super. 2005)). “On appeal from an order interpreting a marital
settlement agreement, we must decide whether the trial court committed an
error of law or abused its discretion.” Id.“Marriage settlement agreements are governed by the law of contracts.”
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Sorace v. Sorace, 655 A.2d 125, 127 (Pa.Super. 1995), appeal denied, 542
Pa. 673, 668 A.2d 1135 (1995). See also Crispo v. Crispo, 909 A.2d 308(Pa.Super. 2006) (explaining where property settlement agreement did not
merge into divorce decree, it stood as separate contract subject to law
governing contracts). “Because contract interpretation is a question of law,
this Court is not bound by the trial court’s interpretation.” Mazurek v.
Russell, 96 A.3d 372, 378 (Pa.Super. 2014) (quoting Stamerro, supra at
1257).
When analyzing contracts which involve clear and
unambiguous terms, a court must look to the writing itself
to give effect to the parties’ understanding. The court must
construe the contract only as written and may not rewrite
the contract or give it a construction that conflicts with the
plain, ordinary and accepted meaning of the words used.
Sorace, supra at 127 (internal citations omitted).
Where the contract terms are ambiguous, however, the
court is free to receive extrinsic evidence to resolve the
ambiguity.
A contract will be found to be ambiguous only if it is fairly
susceptible of different constructions and capable of being
understood in more than one sense. It is the function of the
court to decide, as a matter of law, whether the contract
terms are clear or ambiguous. The fact that the parties have
different interpretations of a contract does not render the
contract ambiguous.
Tuthill v. Tuthill, 763 A.2d 417, 420 (Pa.Super. 2000), appeal denied, 565
Pa. 675, 775 A.2d 808 (2001) (internal citations omitted).
“Importantly, Social Security benefits are not subject to equitable
distribution. A trial court may only distribute money and property that is part
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of the marital estate.” Powell v. Powell, 577 A.2d 576, 580 (Pa.Super.
1990) (internal citations omitted). Where a court is required to make
equitable distribution of martial assets, “to the extent part of [a state] pension
might figuratively be considered ‘in lieu of’ a Social Security benefit[,] that
portion should be exempted from the marital estate.” Cornbleth, supra at
371. Nevertheless, when parties have entered into a marriage settlement
agreement: “In the absence of a specific provision to the contrary appearing
in the agreement, a provision regarding the disposition of existing property
rights and interests between the parties … shall not be subject to modification
by the court.” 23 Pa.C.S.A. § 3105(c).
Instantly, the trial court evaluated Husband’s request for a Social
Security set-off in the QDRO. In light of the basic principles of contract
interpretation, the court determined:
[T]he [c]ourt finds Paragraph 12 of the MSA is clear and
unambiguous. The language does not include a Social
Security set-off, which could have been included if that had
been the intent of the Parties. The [c]ourt agrees that a
modification of the Proposed QDRO to include a Social
Security set-off would be an impermissible modification to
the plain language of the Parties’ agreement.
(Trial Court Opinion at 6).
Our review of the record supports the court’s determination.
Significantly, Mr. Cramer’s testimony confirmed that the MSA did not
specifically authorize a Social Security set-off:
[Mr. Cramer]: [Wife] can file for Social Security
benefits because the [Q]DRO doesn’t deal with Social
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Security at all….
[Husband’s Counsel]: I understand that, but does your
QDRO recognize that some of the benefits earned by
[Husband] is not marital because it is excluded by case law
in Pennsylvania due to the fact that it represents money that
is not taken out of his pay for contribution to Social
Security?
[Mr. Cramer]: No, the [Q]DRO doesn’t reflect
that. It just reflects the language in the settlement
agreement that says the award is 50 percent times the
marital—
[Husband’s Counsel]: But you acknowledge, do you
not, that the plan cannot pay to [Wife] money that—it’s like
a tier one and a tier two benefit; am I correct in that?
[Mr. Cramer]: I mean if you’re trying to fulfill a
Social Security offset that has to be calculated in the
domestic relations order. That wasn’t in the settlement
agreement, so we didn’t make any calculations for
that.
(N.T. Hearing at 20-21) (emphasis added).
Contrary to Husband’s position, the court could not rewrite the MSA to
add language requiring a Social Security set-off. See Sorace, supra.Moreover, the court correctly recognized that the case law relied on by
Husband, including Cornbleth and its progeny, is distinguishable from the
instant case. (See Trial Court Opinion at 7) (recognizing that Husband relied
on cases involving equitable distribution orders rather than marriage
settlement agreements). Under these circumstances, the court did not
commit an error of law in concluding that Section 3105(c) precluded the need
for a Social Security set-off in the QDRO. See Mazurek, supra; Kraisinger,
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supra.
In his second issue, Husband argues that the QDRO should not preclude
him from enrolling in the DROP. Husband acknowledges that Paragraph 12 of
the MSA expressly governs the amount of his pension Wife is entitled to
receive. Nevertheless, Husband argues that the issue of whether his
participation in DROP impacts Wife’s share of his pension benefit is not yet
ripe, and the trial court should have waited until Husband formally enrolls in
DROP before deciding whether such participation violates the MSA. Husband
claims that if his participation in DROP does affect the amount of his pension
that Wife is to receive, the court may alter the QDRO to reflect the parties’
original agreement. Husband concludes that the court should not have
prohibited him from participating in DROP. We disagree.
Instantly, Paragraph 12 of the MSA sets forth both the amount of money
Wife is to receive from Husband’s pension plan, as well as the method of
calculating that amount. (See MSA at ¶12). Although Paragraph 12 does not
specifically reference the DROP benefit, Mr. Cramer testified about the
potential impact of Husband enrolling in DROP:
[Mr. Cramer]: A DROP program allows an officer to
essentially tell the plan that he is going to retire within a
specific period of time, typically one to four years. That time
is called a DROP entry date. If he is in the DROP period—
he is not—the monthly pension would have been frozen at
the DROP entry date. In the event the officer retires within
one to four years, the pension accumulated in that DROP
account, which is basically a ledger account, the amount
accumulated, which is the monthly pension for each month,
that is paid out of a lump sum.
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* * *
[Wife’s Counsel]: Okay. So at the time you drafted the
QDRO, did the city of DuBois have a DROP plan—or DROP
program?
[Mr. Cramer]: No, they did not based upon the
ordinance which I had here.
* * *
[Wife’s Counsel]: So once they’ve added this program, if
[Husband] elects to join in the DROP program, will it affect
[Wife’s] marital portion?
[Mr. Cramer]: Yes, because when he enters the
DROP, the pension is effectively frozen and does not
continue to increase while [Husband] continues to work
while in the DROP. So the pension is frozen, that does
obviously impact the amount that goes to [Wife].
(N.T. Hearing at 15-16).
Based upon the foregoing, the court determined: “The record reflects
that, at the time the MSA was executed and filed, the City of DuBois did not
offer a DROP option. Therefore, under settled contract law, the [c]ourt cannot
infer that either Party considered the DROP option when the MSA was
negotiated or executed.” (Trial Court Opinion at 4) (internal citation omitted).
The court also relied on Mr. Cramer’s testimony to find that Husband’s
participation in DROP would effectively prevent Wife from receiving the full
portion of Husband’s pension that she bargained for in the MSA. (See id. at
5).
In light of the relevant case law, the court did not err in interpreting
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Paragraph 12 as prohibiting Husband from participating in DROP. The record
supports the court’s conclusion that Husband’s participation in DROP would
unilaterally change the denominator of the coverture fraction, which the
parties agreed upon in Paragraph 12. See Sorace, supra (reiterating that
court may not unilaterally modify terms of marriage settlement agreement
where agreement specifically states that it is to be incorporated into, but not
merged with, divorce decree). See also J.W.S. Delavau, Inc. v. Eastern
America Transport & Warehousing, Inc., 810 A.2d 672, 681 (Pa.Super.
2002), appeal denied, 573 Pa. 704, 827 A.2d 430 (2003) (stating, “once a
contract has been formed, its terms may be modified only if both parties agree
to the modification and the modification is founded upon valid consideration”).
Consequently, we affirm the order disposing of Wife’s petition for special relief.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/17/2021
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