Swartz, B. v. Swartz, E.

• Court: Superior Court of Pennsylvania
• Decided: January 29, 2020
• Docket: 1457 MDA 2019
• Status: Unpublished

Opinion

J-S02029-20 J-S02030-20

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BRENDA L. SWARTZ : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellee : : v. : : EARL A. SWARTZ : : Appellant : No. 1457 MDA 2019

Appeal from the Order Entered July 31, 2019 In the Court of Common Pleas of Union County Civil Division at No(s): CV-12-0512

BRENDA L. SWARTZ : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : v. : : EARL A. SWARTZ : : Appellee : No. 1488 MDA 2019

Appeal from the Order Entered July 31, 2019 In the Court of Common Pleas of Union County Civil Division at No(s): CV-12-0512

BEFORE: BENDER, P.J.E., KING, J., and MUSMANNO, J.

MEMORANDUM BY KING, J.: FILED JANUARY 29, 2020

Appellant, Earl A. Swartz (“Husband”), and Cross-Appellant, Brenda L.

Swartz (“Wife”), appeal from the order entered in the Union County Court of

Common Pleas, which granted in part and denied in part Husband’s motion to

amend a Qualified Domestic Relations Order (“QDRO”). We affirm.

In its opinion, the trial court accurately set forth the relevant facts and J-S02029-20 J-S02030-20

procedural history of this case. Thus, we have no reason to restate them.1

At No. 1457 MDA 2019, Husband raises the following issue for our

review:

WHETHER THE TRIAL COURT ERRED, AS A MATTER OF LAW, IN DETERMINING THAT [WIFE] IS ENTITLED TO THE BENEFIT OF [HUSBAND’S] SALARY ADJUSTMENTS FOR THE PURPOSE OF DETERMINING [WIFE]’S PRO RATA SHARE OF [HUSBAND’S FEDERAL EMPLOYEES’ RETIREMENT SYSTEM (“FERS”)] PENSION WHEN THE PARTIES’ MARITAL SETTLEMENT AGREEMENT IS SILENT AS TO ANY SUCH ADJUSTMENTS?

(Husband’s Brief at 1).

At No. 1488 MDA 2019, Wife raises the following issue for our review:

DID THE [TRIAL] COURT ERR BY GRANTING HUSBAND’S MOTION TO AMEND [THE QDRO] FILED IN EXCESS OF FIVE (5) YEARS FOLLOWING THE ENTRY OF THE [QDRO], THEREBY VIOLATING THE VALID MARRIAGE SETTLEMENT AGREEMENT, 42 PA.C.S.[A.] § 5505 AND DOING SO WITHOUT ANY SUPPORTING FACTS OF RECORD?

(Wife’s Brief at 4).

After a thorough review of the record, the briefs of the parties, the

applicable law, and the well-reasoned opinion of the Honorable Michael T.

Hudock, we conclude the parties’ issues merit no relief. The trial court opinion

____________________________________________

1 On August 29, 2019, Husband timely filed a notice of appeal at No. 1457 MDA 2019. Wife timely filed a cross-appeal on September 10, 2019, at No. 1488 MDA 2019. See Pa.R.A.P. 903(b) (explaining if timely notice of appeal is filed by party, any other party may file notice of appeal within 14 days of date on which first notice of appeal was served, or within time otherwise prescribed by this rule, whichever period last expires). The cross-appeals were mistakenly listed consecutively. On January 14, 2020, this Court issued an order consolidating the cross-appeals sua sponte.

-2- J-S02029-20 J-S02030-20

comprehensively discusses and properly disposes of the questions presented.

(See Opinion in Support of Order, filed July 31, 2019, at 3-7) (finding:

regarding court’s jurisdiction to modify QDRO, extraordinary circumstances

exist to justify modification; due to policy change beyond parties’ control or

contemplation, QDRO now grants Wife portion of annuity supplement to which

she was not entitled pursuant to terms of parties’ marital settlement

agreement (“MSA”) at time they executed it; MSA is silent as to annuity

supplement; MSA specifically identified Wife’s entitlement to “Husband’s gross

monthly annuity,” former spouse survivor annuity, and Husband’s Thrift

Savings Plan; MSA makes clear parties did not intend for Wife to receive

portion of annuity supplement, and mutual mistake has occurred as result of

policy change; even if MSA was ambiguous, Wife would not be entitled to

annuity supplement; MSA and QDRO would not have awarded Wife portion of

annuity supplement at time parties executed MSA or court entered QDRO;

regarding Husband’s salary adjustments, court does not find mutual mistake;

MSA makes clear Wife is entitled to portion of “Husband’s gross monthly

income”; parties made no exceptions in MSA for Husband’s salary

adjustments, even though MSA specifically contemplated Husband’s service

for periods of time outside parties’ marriage2). Accordingly, we affirm based

2 Further, in 2004, the legislature added a subsection to the Divorce Code regarding the distribution of defined benefit pensions, at 23 Pa.C.S.A. § 3501(c). See 23 Pa.C.S.A. § 3501(c)(1) (stating in case of marital portion of

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on the trial court’s opinion.

Order affirmed.

Judge Musmanno joins this memorandum.

President Judge Emeritus Bender concurs in the result

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 01/29/2020

defined benefit retirement plan being distributed by means of deferred distribution, defined benefit plan shall be allocated between its marital and non-marital portions solely by use of coverture fraction). “Thus, the non- employee spouse is permitted to enjoy increases in value occasioned by continued employment of the worker.” Smith v. Smith, 595 Pa. 80, 102, 938 A.2d 246, 259 (2007) (internal citation omitted). In other words, in general, “the determination of the marital potion of a defined benefit pension will entail a straightforward application of the coverture fraction to the final total value of the pension, even though the value has increased due to years of postseparation employment.” Id. Here, Husband’s reliance on Katzenberger v. Katzenberger, 534 Pa. 419, 633 A.2d 602 (1993) affords him no relief because that case pre-dates the legislature’s addition of Section 3501(c).

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BRENDAL. SWARTZ, IN THE COURT OF COMMON PLEAS Plaintiff OF THE 17™ JUDICIAL DISTRICT OF PENNSYLVANIA vs. UNION COUNTY BRANCH

EARL A. SWARTZ, CIVIL ACTION - LAW Defendant NO. 12-0512

OPINION

HUDOCK. P.J .• July31. 2012

Defendant Earl A. Swartz filed a Motion to Amend Qualified Order on January 23, 2019.

Plaintiff B.tenda Swartz filed a Response to Defendant's Motion to Amend Qualified Order and

Plaintiff's Counterclaim for Attorney Fees. Defendant asserts that he will receive an "annuity

supplement'' upon retirement "which is a supplement annuity received by law enforcement and a few

others, such as members of Congress, as additional compensation when they retire earlier than Social

Security benefits begin." Motion to Amend, Paragraph 6. Previously, the Office of Personnel

Management considered the "annuity supplement" separate from the apportionment to a former

spouse through a Qualified Order that is silent as to the annuity supplement. Defendant alleges that

now the Office of Personnel Management will apply the state court ordered marital share to both the

basic annuity and the annuity supplement when not specifically addressed. Defendant assert� that tthe

1 parties did not contemplate the annuity supplement, and therefore, the contract was the product of

their mutual mistake. Additionally, Defendant asks that the Court reform the Qualified Order to

specific exclude Plaintiff's entitlement to "salary adjustments."

The parties married November 4, 1984. The parties executed a Marriage Settlement

Agreement, Agreement, on November 25, 2013. The Agreement contained a provision titled

"Husband's FERS Benefits" which reads:

"(11) Husband is a participant in the Federal Employees Retirement System (hereinafter referred to as "FERS"). Husband's FERS benefits have accrued during the marriage. Wife is to be awarded by means of a Qualified Order fifty-five per cent (sic) (55%) of the fraction of Husband's gross monthly annuity whose numerator is the number of months of Federal civilian and military service that Husband performed during the marriage and whose denominator is the total number of months of Federal civilian and military service performs by Husband. The marriage shall be identified as beginning November 4, 1984 and to have ended July 11, 2012 for purposes of calculating the former spouse annuity and former spouse survivor annuity. In the event Wife dies before Husband, the former spouse annuity benefit shall be made payable to Bethany M. Swartz and Bradley Swartz.

A former spouse survivor annuity shall be awarded to Wife equal to fifty per cent (sic) (50 %) of Husband's employee annuity. Wife's share of Husband's employees annuity will be reduced by the amount of fifty pet cent (sic) (50 %) of the costs associated with providing the former spouse annuity awarded in the above paragraph and Husband's share of the employee annuity will be reduced by the amount of fifty per cent (sic) (50%) of the costs associated with providing the former spouse annuity awarded in the above paragraph. During Wife's lifetime, the United States Office of Personnel Managctnent shall be directed to pay Wife's share of the gross annuity or former spouse survivor annuity directly to Wife.

The United Statei.f Office of Personnel Management shall be directed by Qualified Order not pay Husband any refund of his employee contributions so that any awards to Wife as state above shall not be adversely affected.

The Court of Common Pleas issuing a· Divorce Decree in this matter shall retain jurisdiction as part of the decree in divorce for the purpose of enforcement, amendment or modification of any Qualifying Order necessary for the acceptance of the United States Office of Personnel Management,

The above awards of the monthly annuity and former spouse survivor annuity are equitable distributions of property pursuant to the Divorce Code of the Commonwealth of Pennsylvania and not awards of alimony, spousal support or alimony pendente lite.

2 Both patties agree and authorize the Court of Common Pleas having jurisdiction in this matter to execute the Qualified Order, a copy of which is attached hereto and identified as "Exhibit A" and approved by the parties.'The QualifJ..ed Order to be issued shall accompany the Divorce Decree submitted upon transmittal of the r.e�a,;d by praecipe."

The Court granted the parties' request for divorce by final Decree dated December 20, 2013. The

Court entered a Qualified Order on December 20, 2013. The patties' Agreement and the Qualified

Order are silent as to the annuity supplement and "salary adjustments." Defendant's Motion to Amend

Qualified Order was filed January 23, 2019, in excess of five years from the entry of the Qualified

Order and Decree.

Both parties submitted briefs concerning the Court's jurisdiction to entertain Husband's

motion filed in excess of five years following the entry of the Qualified Order. The Superior Court in

Haywood v. Haywood, 808 A.2d 232 (Pa. Super. 2002) addressed a similar issue holding that extraordinary

circumstances existed to modify the parties, QDRO even after a six-year delay. The improper QDRO

in Haywood had the effect of granting "Wife 50% of Husband's� military pension rather than 50%

of the 'Jtmtit:.ilport.ii?l1 of his pension as agreed to by the parties in the 1989 consent order and as

provided by Pennsylvania law." Hayward v. Hayward, 808 A.2d 232, 236 (Pa. Super. 2002).

The Court wrote:

We must first address the issue of Husband's six-year delay in filing his motion for special relief requesting modification of the 1995 QDRO. Typically, a court may modify an order within thitty days after its entry, according to the following statute:

MN?il·(;;·JS ..� S5Q5. Modification of orders

Exeept "1$ otherwise :v. rovided 101:- p.te.scfibec. b.y law, -a court up0n notice to the p�ties 11'!-n 'm.Qclify �r rescind any o.td� within �o day� ·.�tei;. _its entty, netwithstanding' the. prior tettninat:ip_n ef ·a.q.y term e.>f.cou.r:t, .if nd appeal form .such order baa been taken or ajlowecl.

42 Pn.C.S. � 5505, In S1w #1J11 ·P. 1 .St()rkt:am 6�B A.2d 1.M11-,. 13.;}7 (.Pu;St1pe-r. 12n), we concluded .,section 55Q:5 applies to petitions to modify QDROs. We stated:

3 The lower court's authority under 42 Pa,C.S.A. � 5·iJ05 to· inodify or rescind. an qr_der is- almost �1l�ely dis.¢retio.n'ai.-y.; this powe.r �y be e�erdsed ilia .prin.le,. or tna.y, be iov-0k�d hr a request {Qt recQ�tsldetai:ion ,61.ed by the parties, and the couet's de

Although 42 P.a.C.S.A.j 5505 _gives·· the 1:thl aorut broad discretion, the tr.W. court may consider i .motien for reconsideration oply if the motion � .£,J.ed within th.itty days of the entry of the disputed order. Afte.r the expiration of t:h.irty days, the trial court loses its bread. discretion to modify, and the order cm b�. �pene:cl er v:ata:ted only upon a sho� of extrinsic fraud, lack 0£ jurisdiction over the subject 1,nattet, a f::ttal .defect appru;ent on rhe fa-.ce o'f tb.e regucci o.t .some other evidence of emao:tdinary; cause justifying intervention by the court. Id: (emphasis ·added} (cita:ti�nS" ''

�t:Ia__ot<.iln.ary circumstarrces have been.fonnd to exist in the context of mistakes made by the court or its offi,i;;ers:. d1-oatA.111. Crtdtd::o.rp.. ,;. Thomas Minz'·Marketi, 230 Pa. Super. 210, 326 A.2d 5.17 ·

Nevertheless, in Stockton we stated extraordinary circumstances exist where there is a fatal defect apparent on the face of the record. Stockton, supra, 698 A.2d at 1331.

Hqywmr.l u: Hqyward, 808 A.2d 232, 236 (Pa, Super. 2002).

The Court finds this case to be similar in that extraordinary cause exists to modify the parties'

Qualified Order as to the annuity supplement. Due to a change outside the patties' control or

contemplation the Qualified Order has the effect of granting Wife a portion of the supplement annuity

to which she was not entitled pursuant to the terms of the parties' Agreement at the time it was

entered.

4 Plaintiff specifically denies that the Agreement between the parties contained any specific

agreement to exclude any benefit of retirement. "The alleged mistake did not enter into Wife's

contemplation when the Ma.triage Settlement Agreement was entered, it was not an essential fact

which formed inducement on her part ... ,, Plaintiff's Response to Defendants Motion to Amend

Qualified Order and Plaintiff's Counterclaim for Attorney Fees.

Established Pennsylvania law states:

When interpreting the language of a contract, the io,te.o.tion of the p�d�·s is a paramount consideration. In determining the intent oJ the parties to a written agreement, the court looks to what they have clearly expressed, for the law does not assume that the language was chosen carelessly. When interpreting agreements containing clear and unambiguous terms, we need only examine the writing itself to give effect to the parties' intent.

In other words, the intent 0£ the parii-es is generally the writing itself. In ascertaining the intent of the partie.s to a co.ntt-aatwhen·unaleat from the writing itself, the court considers the parties' outward and objective manifestations of assent, as opposed to their undisclosed and subjective intentions. Thus, The court may take into consideration the surrounding circumstances, the situation of the parties, the objects they apparently have in view, and the nature of the subject- matter of the agreement The court will adopt an interpretation that is tnost reasonable and probable bearing in mind the objects which the parties intended to accotnplish through the agreement.

Sea also Melton v. Melton, 831 A.2d 646, 653-654 (Pa. Super. 2003), (stating court may take into account attendant circumstances to determine parties' intent, when parties' intentions ate unclear). "Before a court will interpret a provision in ... a contract in such a way as to lead to an absurdity or make the ... contract ineffective to accomplish its purpose, it will endeavor to find an interpretation which will effectuate the reasonable result intended."

Additionally, this "Commonwealth has accepted the principle in Restatement (Second) of Contracts § 205 that 'every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. "The duty of 'good faith' has been defined 111

as 'honesty in fact in the conduct or transaction concerned. "'

The obligation to act in good faith in the performance of contractual duties varies somewhat with the context, and a complete catalogue of types of bad faith is impossible, but it is possible to recognize certain strains of bad faith which include: evasion of the spirit of the bargain, lack of diligence and slacking off, willful tendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party's performance.

A similiu: requisement has been developed in common law called the "doctrine of necessary implication," which states:

5 In the absence of an express provision, the law will imply an agreement by the parties to a contracr to do and perform those tirings that according to reason and justice they should do in or-d�:t to .cru:ty Quf the purpose for which the co�ttaet Wij,S made and to.refrain from doing anything that would destroy or injute the other pa1ty'·s rightto receive the Eruits--i;>f the .eontract,

11 .(�ourts e:mp.loy the doctrine of necesaary implication as a means of avoiding injustice by infer:tlng contract provisions that reflect the· pru:ties1· silent intent." "In the abse�ee of an expr�s.& term, the doctrine of necessary implication may act to imply a requirement necessitated b'y. reason and justice without. v;hich the in.ten.t of the parties is frustrated."

"The duty of good faith and the doctrine of necessary implication apply only in limited circumstances. Implied · duties· cannot '11:Utnp· the exp,tess pt6v.isions in the· eontract, '' "Both the Wtl'>li¢'d covenant of good faith and the doctrine of necesfia,ty. itx:iplic�t;iop ·are pririciples for courts to harmonize the reasonable expectations ·of the parties with the inteat of the contractors and the terms in their contract"

Stamerro v. Stamerro, 889 A.2d 1251, 1258-59 (Pa. Super. 2005(internal citations omitted).

It is clear from the parties' Agreement that the parties did not intend for Plaintiff to receive a

portion of the annuity supplement, and a mutual mistake has occurred as result of the change in policy.

The Agreement is silent as to the supplemental annuity; however, it specifically identifies Plaintiff's

entitlement to "Husband's gross monthly annuity," former spouse survivor annuity, and (in a separate

section) Husband's Thrift Savings Plan. Agreement, page 6. Further, each patty specifically released

the other from any additional claims.

Even if the Court were to find the Agreement to be unclear and consider attendant

circumstances, the Court would still find in Defendant's favor. The Agreement and the subsequent

Qualified Order would not have entitled Plaintiff to a portion of the supplemental annuity at the time

of the parties' Agreement or the entry of the order. The Court would consider the legal effect of the

parties' Agreement at the time it was entered.

A recent decision, Conway v. Conway, is instructive, although not controlling. The parties

entered into an agreement .regarding their marital pi:operty including division of Husband's police

6 pension. At the time the parties entered their agreement, a former spouse was treated as a spouse,

pursuant to a city ordinance. The Court noted: "The record makes dear the parties intended for Wife

to receive pension benefits as a spouse or surviving spouse under the Plan". Conway v. Conway, 2019

PA Super 138, 209 A.3d 367 (Pa. Super. 2019). Subsequent to the parties, agreement, the city changed

the ordinance and a former spouse was no longer treated as a spouse. The plan administrator rejected

Wife's proposed QDRO due to the change in the ordinance. The Trial Court was reversed for

considering the date the Association received the plan as controlling (after the change to the

ordinance) and determinative of Wife's entitlement to benefits. Id.

The Court does not find a mutual mistake occurred in regards to Defendant's salary

adjustments. The Agreement is clear that Plaintiff is entitled to a portion of "Hus band's gross monthly

annuity." Agreement, page 6. The parties made no exception for Husband's salary adjustments,

although the Agreement specifically contemplated Husband's service for periods of time outside of

the marriage.

The Court grants Defendant's Motion to Amend Qualified Order. Defendant shall submit a

proposed Qualified Order to the Court within 60 days which specifically excludes the Defendant's

supplemental annuity pursuant to the parties' Agteetnent. The Court denies Plaintiff's Counterclaim

for Attorney's fees.

BY THE COURT:

MICHAEL T. HUDOCK, P.J. , ·' 'I �,rn�cf!Al�Y-Gl.l':l'l.K r�F 1:0IJRTS. f 1,0 UHl\)l'J r ( •t IN 1 Y, I·'/\. c;rn111i1r:u rirmM 'ltil fo11;DHP ON THIS DATE

AUG ·- 1 201\:J

7 c: Martin R. Wilson, Esquire, Counsel for Plaintiff Brian L. Kerstetter, Esquire, Counsel for Defendant The Honorable Louise 0. Knight, S.J. Jenna A. Neidig, Esquire, Law Clerk Administrative Assistant

e-cop1es: The Honorable Michael T. Hudock, P .J. The Honorable Michael H. Shelley, J.