Opinion
XXXXXXXX.
Decided December 30, 2010.
Evelyn K. Issac, Esq., Attorney for Plaintiff, Hastings-on-Hudson, New York.
Lauren K. Bilello, Esq., Miano Colangelo, Attorneys for Defendant, Harrison, New York.
In this post-judgment of divorce application, the plaintiff moves to vacate the Qualified Domestic Relations Order entered on April 13, 2000 (QDRO 2); to reinstate the Qualified Domestic Relations Order consented to by the parties and entered on September 22, 1999 (QDRO 1); and for counsel fees related to filing this application. The plaintiff maintains that QDRO 2 should be vacated because it was improperly entered without the plaintiff's consent; that the defendant never moved to vacate QDRO 1 pursuant to CPLR § 2221; that QDRO 2 was never served upon the plaintiff with notice of settlement; that QDRO 2 was never served upon the plaintiff with notice of entry after it was signed and entered by the court pursuant to CPLR § 2220; and that the plaintiff had no knowledge that QDRO 2 was signed and entered until he recently began to process the paperwork for his retirement. The plaintiff further maintains that QDRO 2 significantly changes the parties' separation and settlement agreements and judgment of divorce by giving the defendant a one-third post-retirement death benefit from the plaintiff's pension, a provision to which they never agreed.
The defendant opposes plaintiff's motion on the grounds that QDRO 1 was incorrect and did not comport with the parties' separation agreement; that the plaintiff had more than sufficient notice to oppose the entry of proposed QDRO 2; that the plaintiff's claim is barred by the statute of limitations and the doctrine of laches.
For the reasons set forth more fully below, the plaintiff's motion is granted to the extent of vacating QDRO 2 and reinstating QDRO 1. QDRO 1 properly provides the parties with the pension rights to which they are entitled under their separation and settlement agreements and the judgment of divorce, while QDRO 2 improperly gives the defendant post-retirement survivorship benefits as part of its order. There is no proof in the record that the plaintiff or his counsel ever received notice of any kind that QDRO 2 was signed and entered as an enforceable order of the court until recently when the plaintiff began to process his retirement papers, and therefore, the six-year statute of limitations has not expired on plaintiff's claim. The defendant has not made a factual showing as to how the plaintiff's 10 1/2-year delay in moving to vacate has caused her prejudice and how her financial position has changed as the result of her reliance upon QDRO 2 in the intervening period. In the interests of substantial justice, under the facts and circumstances presented here, QDRO 2 should be vacated and QDRO 1 should be reinstated and deemed in full force and effect.
Factual and Procedural Background
The parties executed a separation agreement on October 14, 1997 and a stipulation of settlement on September 9, 1999, both of which were incorporated, but not merged into the judgment of divorce entered on September 22, 1999. A Qualified Domestic Relations Order, which was consented to by the parties and approved as to form and substance by their counsel and the New York State and Local Retirement System (NYSLRS), was also entered on September 22, 1999 (QDRO 1).
According to paragraph 8 of the separation agreement dated October 14, 1997, the defendant was entitled to $18,000.00 annually as her share of the plaintiff's pension from the County of Westchester, with the defendant being permitted to file a QDRO with the pension fund. The separation agreement was silent as to whether the defendant was entitled to survivor benefits, either pre-or post-retirement, in the event the plaintiff predeceased her. Under paragraphs 5 and 6, each party represented that they were in good health and self-supporting, and waived any claim to maintenance and support from the other. Due to the age of their children, no child support was due and owing by either party.
The stipulation of settlement dated September 9, 1999, made no changes or reference to the pension distribution between the parties or the maintenance and support provisions. However, under the article entitled "Life Insurance," the plaintiff agreed to maintain in full force and effect the pre-retirement death benefit available to him as a Tier I member and employee of Westchester County, so long as the benefit remained available at no cost to him, and to irrevocably name the defendant as a one-third beneficiary of the death benefit, and to name the children as two-thirds beneficiaries, in whatever distribution the plaintiff elected. The defendant waived entitlement to any other life insurance held by the plaintiff.
QDRO 1, which was entered on the parties' consent and approved as to form and substance by their counsel, stated that at such time as the plaintiff has retired and is actually receiving a retirement allowance, the defendant was entitled to $18,000.00 per year from the plaintiff's pension as her retirement allowance, payable in monthly installments of $1,500.00. The order also directed the plaintiff to designate the defendant as a one-third beneficiary of the plaintiff's retirement pension plan in accordance with the parties' stipulation of settlement dated September 9, 1999, so that in the event the plaintiff died before retiring, the defendant would be able to receive her one-third pro-rata share of any survivor benefits under the plan.
On April 12, 2000, the defendant submitted a proposed amended QDRO (QDRO 2) to the court, along with a cover letter requesting that it be signed because QDRO 1 did not contain all of the language required by the NYSLRS. Although plaintiff's counsel was copied on the letter to the court submitted by defendant's counsel, proposed QDRO 2 was never served with notice of settlement. Proposed QDRO 2 contained an additional paragraph, stating that the plaintiff:
is directed to elect at the time of retirement, assuming the alternate payee is then living, to receive the retirement allowance pursuant to the terms of a Special Joint Allowance Option to be prepared by the New York State Local Retirement Systems for the purpose of providing the Alternate Payee, upon the Participant's death, with a monthly retirement allowance payable for her life based upon the amount herein above set forth.
This clause gives the defendant, in the event the plaintiff predeceases her after he retires, a survivor interest in his pension, and effectively restrains the plaintiff from naming another beneficiary.
Upon receiving a copy of proposed QDRO 2, plaintiff's counsel promptly sent a letter to the court the following day, on April 13, 2000, objecting to QDRO 2 and requesting that the court refrain from signing and entering it pending the plaintiff's further careful review. Plaintiff's counsel noted to the court that it appeared that proposed QDRO 2 changed the pension's method of distribution and limited the plaintiff's election options, which was not in compliance with the parties' separation agreement regarding the pension distribution.
Unbeknownst to the plaintiff, QDRO 2 was signed and entered that same day, April 13, 2000. It is unclear from the parties' submissions or the papers contained in the court file whether the court received plaintiff's objections or considered them prior to entry of QDRO 2 with the Westchester County Clerk. Neither the parties' submissions, nor the court file show any indication that a copy of QDRO 2 was ever served upon the plaintiff or his counsel with notice of entry, or that they were placed on notice of any kind that QDRO 2 was signed or entered, or that QDRO 1 was no longer in effect.
Thereafter, by letter dated April 17, 2000, plaintiff's counsel contacted the NYSLRS about the discrepancy in the QDRO language and received a letter response from it dated May 25, 2000, stating that it had accepted QDRO 1 by letter dated October 15, 1999, and that it remained acceptable. In its letter, the NYSLRS clarified that it did not require any amended language for the QDRO. The letter from NYSLRS makes no reference to QDRO 2, nor does it place the plaintiff or his counsel on notice that proposed QDRO 2 was ever signed and entered or that QDRO 1 was no longer in effect.
There is no record of any further action taken by either plaintiff's counsel or defendant's counsel in the intervening 10 ½-year-period with regard to the QDROs.
The plaintiff now moves to vacate QDRO 2 and reinstate QDRO 1, which was consented to by both parties, approved as to form and substance by their counsel and the NYSLRS, and signed and entered by the court on September 22, 1999. The plaintiff claims he had no prior knowledge that QDRO 2 was signed and entered by the court until he recently began preparing for retirement. He disputes the provision in QDRO 2 that gives the defendant a one-third interest in the plaintiff's pension following his retirement should he pre-decease the defendant, and has limited his right to elect his current wife as beneficiary instead of the defendant. The defendant argues that QDRO 1 was incorrect, as it did not comport with the agreement reached by the parties. She believes she is entitled to her equitable share of the plaintiff's pension during her lifetime and believes that was the parties' intent when they executed the separation agreement.
Discussion/Analysis
"A proper QDRO obtained pursuant to a stipulation of settlement can convey only those rights to which the parties stipulated as a basis for the judgment." ( McCoy v. Feinman, 99 NY2d 295, 304.) A judgment of divorce and QDRO awarding an interest in a husband's pension plan do not automatically include death benefits. (Kazel v. Kazel , 3 NY3d 331 , 332.) If the intent is to distribute such benefits, it must be explicitly stated, as pension benefits and death benefits are two distinct matters. ( Id.) Reference to a pension plan or pension benefits will not be deemed to include death benefits. ( Id. at 334; see also Pagliaro v. Pagliaro , 31 AD3d 728 , 730 [2d Dept. 2006].)
When a QDRO conflicts with the stipulation of settlement upon which it was based, the stipulation of settlement controls, and the QDRO must be modified accordingly. (Condon v. Condon , 46 AD3d 596 , 598 [2d Dept 2007].) And, a court has the authority to amend a QDRO to accurately reflect the provisions of the agreement pertaining to the distribution of pension benefits. ( Berardi v. Berardi , 54 AD3d 982 , 986 [2d Dept 2008].)
The parties' agreed in their separation agreement dated October 14, 1997, that once the plaintiff was retired and receiving a retirement allowance, the defendant would receive $18,000.00 annually as her share of the plaintiff's pension from the County of Westchester, making no provision for survivor benefits in the event the plaintiff predeceased her. The stipulation of settlement dated September 9, 1999, made no changes to the pension distribution between the parties, but provided the defendant with a pre-retirement death benefit, available at no cost to the plaintiff, in exchange for a waiver of defendant's entitlement to any life insurance benefit. Specifically, under the article entitled "Life Insurance," the plaintiff agreed to provide the defendant with a pre-retirement death benefit that was available to him as a Tier I member and employee of Westchester County so long as the benefit remained available at no cost to him, and to irrevocably name the defendant as a one-third beneficiary of the death benefit, and to name the children as two-thirds beneficiaries, in whatever distribution the plaintiff elected. In exchange for this benefit, which was at no cost to the plaintiff, the defendant waived entitlement to any other life insurance held by the plaintiff.
In accordance with the September 9, 1999 stipulation of settlement, QDRO 1 was consented to by the parties, approved as to form and substance by their counsel and the NYSLRS, and signed and entered by the court. QDRO 1 properly provided the defendant with the agreed-upon pension amount and the pre-retirement death benefit, which was available to the plaintiff at no cost as part of his benefit package. QDRO 2, on the other hand, gave the defendant more rights to the plaintiff's pension than she was entitled under the parties' agreements and judgment of divorce, by improperly granting the defendant both a survivor interest in the plaintiff's pension post-retirement, and limiting his right to elect another as the beneficiary of this interest. There is nothing in the parties' agreements or the judgment of divorce to suggest that the parties intended to provide the defendant with the right to receive survivorship benefits in the event plaintiff predeceased her following his retirement, and therefore, QDRO 2 improperly inserts post-retirement survivorship benefits as part of its order. ( See Casella v. Casella, 306 AD2d 800, 801 [3d Dept 2003].) Accordingly, on the merits, the plaintiff should prevail in reinstating QDRO 1.
The defendant opposes plaintiff's request to vacate QDRO 2 not only on the merits, but also upon the ground that the plaintiff's claim is barred by the statute of limitations. The applicable limitations period for enforcement of a separation agreement is six years. (CPLR 213; see also Curry v. Chollette, 57 AD2d 604 [2d Dept 1977]; Riley v. Riley, 179 AD2d 750 [2d Dept 1992].) This limitations period has been applied to bar an action by a spouse to modify a Court Order Acceptable for Processing (COAP), a document required by the Federal Civil Service Retirement System to distribute pension benefits (similar to a QDRO), commenced seven years after he was notified by the federal pension authority that it had received documents from his former spouse that were being treated as a binding COAP. ( See Chayes v. Chayes , 28 AD3d 355 , 356 [1st Dept. 2006]; Scheinkman, 12 NY Prac., New York Law of Domestic Relations § 18.20 [2009].) In Chayes, the Court held that the breach occurred no later than the date the husband received the letter notifying him of the binding COAP, which was seven years before he commenced the action to modify, and one year after the statute of limitations had expired. ( Id. at 357).
The facts presented here differ from Chayes in that there is no proof in the record that the plaintiff or his counsel received notice of any kind that proposed QDRO 2 became an enforceable order of the court or that QDRO 1 was no longer in effect. Here, QDRO 1 was consented to by the parties, approved as to form and substance by their counsel and the NYSLRS, and was signed and entered as an order of the court on September 22, 1999. Thereafter, on April 12, 2000, the defendant sought to amend QDRO 1 by simply submitting to the court proposed QDRO 2, with a cover letter containing misrepresentations about the NYSLRS requirements. The defendant never moved to vacate or modify QDRO 1, nor was QDRO 2 ever served with notice of settlement. Although plaintiff's counsel promptly sent a letter to the court one day later, on April 13, 2000, objecting to the signing and entry of the order and setting forth specific reasons why QDRO 2 was not in compliance with the parties' agreements, it was signed and entered on that same day.
There is no proof in the record that the court ever received or considered the plaintiff's objections before QDRO 2 was signed and entered that same day, that the order was ever served with notice of entry to place the plaintiff on notice, that plaintiff or his counsel ever received notice of any kind that QDRO 2 became an enforceable order of the court until recently, or that QDRO 1 was no longer in effect. Thus, the six-year statute of limitations period did not begin to run until the date the plaintiff was placed on notice that QDRO 2 was signed and entered as an enforceable order of the court, which was recently when he began to process his papers for retirement. ( See Chayes v. Chayes, 28 AD3d at 356.) Accordingly, the plaintiff's claim is not barred by the statute of limitations.
Indeed, if the defendant intended to enforce QDRO 2, it was incumbent upon her, as the prevailing party, to place the plaintiff on notice by serving him with a copy of QDRO 2 with notice of entry. "Where the rights of a party are or may be affected by an order, the successful moving party, in order to give validity to the order, is required to serve it on the adverse party." ( Lyons v. Butler, 134 AD2d 576, 577 [2d Dept 1987]; CPLR § 2220.)
The defendant also argues that the plaintiff's action should be barred by the doctrine of laches due to the plaintiff's unreasonable delay in bringing this action. "The defense of laches requires both delay in bringing an action and a showing of prejudice to the adverse party." ( Beiter v. Beiter , 67 AD3d 1415 , 1416 [4th Dept 2009], citing Summers v. City of Rochester, 60 AD3d, 1271, 1273 [4th Dept 2009].) Since the plaintiff was never on notice that QDRO 2 had been signed and entered, he should not be charged with causing any delay. ( cf. Lacorazza v. Lacorazza , 47 AD3d 897 , 899 [2d Dept 2008] [where the plaintiff was found guilty of laches for a nine-year delay in moving to vacate a QDRO when she "clearly was aware of its terms immediately after the parties were divorced"].)
Moreover, while the defendant claims that she has been prejudiced by the delay, she has not substantiated her claim with proof of any actual prejudice. Under the terms of the parties' separation agreement entered in 1997, both parties represented that they were self-supporting and waived maintenance and support. The agreements do not entitle the defendant to any post-retirement death benefits under the plaintiff's pension plan. And, other than making a conclusory claim that her financial security has been abolished based upon her reliance on QDRO 2 over the past decade, the defendant makes no factual showing as to how the delay has caused her prejudice and how she has changed her financial position in reliance upon QDRO 2.
The defendant seeks to place blame upon plaintiff's counsel for failing to exercise due diligence in the intervening 10 ½-year-period to ensure that QDRO 1 controlled. While some degree of fault may arguably be placed upon plaintiff's counsel for failing to be more proactive, defendant's former counsel's actions — in presenting QDRO 2 without moving to vacate QDRO 1; in misrepresenting NYSLRS's QDRO requirements to the court; and failing to provide plaintiff with notice of any kind that QDRO 2 had been signed and entered, and was being submitted to the NYSLRS for enforcement — eclipse any inaction by plaintiff's counsel. While the 10 1/2-year lapse in time is indeed troubling, the simple notion of due process — notice and an opportunity to be heard — requires the result reached here.
Furthermore, this Court is mindful of the strong public policy in this state for resolving disputes on the merits, and that "[i]t is the client who is punished by denial of its day in court, not the attorney." ( See Ackerson v. Stragmaglia, 176 AD2d 602, 604 [1st Dept 1991].) The Supreme Court has inherent authority to revisit any of its prior orders "for sufficient reason and in the interests of substantial justice." ( Herr v. Herr , 5 AD3d 550, 552 [2d Dept 2004], citing Woodson v. Mendon Leasing Corp., 100 NY2d 62, 68].) Under the facts and circumstances presented here, even considering the significant lapse in time, the interests of substantial justice would be served by vacating QDRO 2 and reinstating QDRO 1 to appropriately reflect the rights of the parties in accordance with their agreements and judgment of divorce.
The plaintiff's request for counsel fees is denied for failure to submit adequate documentation to support the application. ( Cervone v. Cervone , 74 AD3d 1268 , 1269 [2d Dept 2010].)
Based upon the foregoing, it is hereby
ORDERED, that the Qualified Domestic Relations Order dated April 13, 2000 (QDRO 2) is hereby vacated; and it is further
ORDERED, that the Qualified Domestic Relations Order dated September 22, 1999 (QDRO 1)is hereby reinstated and deemed in full force and effect; and it is further
ORDERED, that the New York State and Local Retirement System shall comply with the directives contained in Qualified Domestic Relations Order dated September 22, 1999 (QDRO 1) in distributing the plaintiff's pension and retirement benefits and shall disregard the Qualified Domestic Relations Order dated April 13, 2000 (QDRO 2).
Any other relief requested and not decided herein is denied.
This constitutes the Decision and Order of this Court.