In your family law practice and in your CFL training, attention to detail is a vital skill. If you miss filing the paperwork necessary to make a strong case, it can affect the results. For instance, in cases involving Qualified Domestic Relations Orders (QDROs), it helps to prepare them and finalize them together with the divorce decree.
Otherwise, as in the recent New Jersey lawsuit of Tapenes v. Perez, lengthy court battles can ensue. It involved drafting a QDRO both parties could agree on several years after their divorce agreement because one wasn’t entered at the time to distribute the ex-husband’s NJ PERS pension.
Case Summary
The couple divorced in 1993. They entered into a settlement agreement, which among other things, divided the marital portion of Juan Tapenes’s pension equally through a QDRO.
The agreement also provided that if Mr. Tapenes died or was separated from the plan (and except for early retirement), he would be entitled to a lump sum payment equal to his plan contributions. It added that “…in which case, plaintiff will be entitled to receive her share of the value of the pension in accordance with the evaluation conducted at the time of the divorce, and not [fifty percent] of defendant’s contributions.”
In 2010, Juan retired and began drawing on the pension without informing his ex-wife, Teresa, or getting a QDRO for the settlement.
He later moved to Florida. In September 2017, Teresa spoke with Juan and also emailed him about preparing a QDRO. A week after her first message, Teresa sent Juan another email confirming she had retained an expert to prepare the QDRO. The expert later sent both parties a draft. It kept to the settlement terms by allotting Teresa half of the marital coverture portion of the pension. It also stated she would receive twenty-five percent of Juan’s part of the pension benefit to satisfy the payments that should have been made as a result of his full pension draw before the QDRO.
After Juan failed to respond to another of Teresa’s emails and a voice message, she filed a motion for entry of the QDRO in October 2017 and mailed him a notice. At the motion judge’s direction, in October 2018, she mailed another notice.
In November 2017, the motion judge entered an order granting Teresa’s motion to enforce the parties’ settlement agreement and compelling Juan to sign the QDRO. Eventually, the trial court entered the QDRO without Juan’s signature.
Afterward, two of Juan’s attorneys wrote to Teresa informing her of his consent to the QDRO. He sought a valuation for a lump sum payment that was not applicable and also wanted to offset the back payments that accrued because he had wrongfully collected her share of the benefits.
Through a third attorney, Juan filed a motion in March 2018 to “vacate” or remove the QDRO.
He claimed the divorce settlement contained an “anti-Marx” formula because the couple did not intend to divide the marital coverture portion of the pension. Instead, he argued Teresa was to receive a lump sum amount equal to half of his contributions to the pension plan during the marriage. Juan also claimed Hurricane Irma prevented him from responding to Teresa’s motion.
The judge denied both motions. Regarding Juan’s claim that the hurricane prevented him from responding to Teresa’s communications and motion, the judge found it was a “red herring” and concluded both parties were in communication after the hurricane occurred.
The judge noted Juan’s attorneys’ correspondence did not object to the coverture formula, but rather the payments owed as part of the QDRO. The judge further noted Juan neither sought reconsideration of nor appealed the November 2017 order or the QDRO. Though he filed a motion under Rule 4:50-1 that allows vacating judgments in certain situations, the judge denied it. Juan didn’t provide a legal or factual reason to have the QDRO vacated.
Superior Court of New Jersey, Appellate Division Verdict
The Appellate Division decision stated that “The QDRO fulfilled the terms of the parties’ settlement agreement, whose plain language required an equitable distribution of the value of the marital portion of the pension. The Marx marital coverture formula effectuates a division of the value of a pension. Panetta v. Panetta, 370 N.J. Super. 486, 494-95 (App. Div. 2004). The settlement agreement did not eschew a Marx formula.
Moreover, other than a self-serving certification authored by his former divorce attorney, defendant provided the motion judge no objective evidence, valuation, or rationale to support his argument why plaintiff should only receive $3903.21 as her share of equitable distribution from the asset. The settlement agreement’s mention of a lump sum distribution pertained only to defendant in the event he died or separated from the plan. Therefore, notwithstanding defendant’s failure to object to the entry of the QDRO, the record does not support his tortured interpretation of the settlement agreement regarding the pension division.”
Fill-in the gaps in your knowledge about these and other financial aspects of divorce settlements and get ahead with the CFL Credential. Find out more in our free information packet today.
Source
Njcourts.gov. (2019). [online] Available at: https://www.njcourts.gov/attorneys/assets/opinions/appellate/unpublished/a4421-17.pdf?c=PuY&fbclid=IwAR2z5GympPcR0Q_lV2Bbm2PP-XAuLQTa_ZyCrPAXXFd5mLf1Ny3EyRNgIe4 [Accessed 12 Aug. 2019].
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