Court Opinion

ID: 4430592
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:44:06.917423+00
Date Added: 2024-06-11T12:46:01.109032
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-0224-17T1

JOANNE K. SNYDER,

        Plaintiff-Appellant,

v.

HOWARD I. SNYDER,

     Defendant-Respondent.
________________________________

              Argued August 8, 2018 – Decided August 24, 2018

              Before Judges Hoffman and Currier.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Family Part, Burlington
              County, Docket No. FM-03-1076-11.

              Ronald G. Lieberman argued the cause for
              appellant (Cooper Levenson, PA, attorneys;
              Ronald G. Lieberman, on the briefs).

              Jonathan   Stone        argued     the     cause     for
              respondent.

PER CURIAM

        In   this   matrimonial     action,    plaintiff     Joanne      K.   Snyder

appeals from the provisions of the August 4, 2017 order compelling

her to execute a Qualified Domestic Relation Order (QDRO) for the
division of her ex-husband's pension.      After a review of the

contentions in light of the record and applicable principles of

law, we affirm.

     After thirty years of marriage, the parties were divorced in

June 2011.   A Final Judgment of Divorce incorporated the parties'

Property Settlement Agreement (PSA).   Defendant Howard I. Snyder

had a pension in pay status at the time of the divorce from which

he was receiving established payments. This pension is the subject

of this appeal.

     Paragraph 3.5 of the PSA addressed the parties' retirement

accounts and pension plans. Specifically as to defendant's pension

in pay status, it stated:

               Wife shall be entitled to $2800.00 a
          month   from  Husband's   Pension  with   the
          remaining monthly payout being the sole
          property of the Husband. Wife will remain on
          the bank account where the funds from the
          Pension are currently deposited until such
          time as a [QDRO] can be drafted and the . . .
          Pension [is] divided as per the above
          specifications. Until such time as a QDRO is
          completed, wife may withdraw $2800.00 a month
          from the bank account that receives the
          monthly Pension payments.

     Paragraph 4.4, entitled "Income Tax Effect," provided: "All

of the foraging(sic) transactions as set forth in Article III,

(Equitable Distribution), are intended to be tax-free events."    It

further stated that any financial events required under Article 6

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of the PSA were "intended to be non-taxable events under the

Internal Revenue Code 1041."

      For more than five years after the divorce, as per the PSA,

plaintiff withdrew $2800 a month from the joint bank account as

her   share   of   defendant's   pension.     During   this   time    period

defendant paid the tax liability for the entire distribution.               In

February 2016, defendant self-prepared a QDRO and presented it to

the pension plan administrator.          Plaintiff's counsel objected to

the form of the QDRO, the plan administrator took no action, and

plaintiff continued to withdraw $2800 tax-free from the bank

account.

      In June 2017, defendant filed a motion, in pertinent part,

compelling plaintiff to execute the QDRO.              Plaintiff's cross-

motion asserted she was entitled to receive $2800 net of taxes

under the PSA, and judicial estoppel prevented defendant from

requiring her to pay taxes on her share of the distribution, which

would result in a downward modification of her net monies.

      Following extensive oral argument, the Family Part judge

issued an oral decision on August 4, 2017, memorialized in an

order under the same date.       In applying the plain language of the

PSA, the judge noted that Paragraph 3.5 did not address the "tax

consequences of distributions received by the Wife from Husband's

pension."     Although he acknowledged the statement in Paragraph 4.4

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that the parties intended transactions in Article III to be non-

taxable events under Internal Revenue Code (IRC) 1041, the judge

advised that Section 1041 did not apply to the tax consequences

of pension distributions made pursuant to a QDRO.                               A pension

distribution was governed by Sections 402(e)(1)(A) and 72 of the

IRC, which provided that a spouse or former spouse of a participant

who   receives     a    distribution         or    payment       under    a   QDRO    is    an

"alternate      payee,"       and    must    pay       federal    income      tax    on    the

distribution or payment.

      Concluding that there was "no explicit provision" in the

parties' PSA that contradicted the pertinent sections of the tax

code,    the    judge   resolved       that,       going      forward,    plaintiff        was

required to pay federal income tax on her share of defendant's

pension; the $2800 was deemed a gross figure subject to tax

obligations under the QDRO.                 Defendant's motion was granted and

plaintiff was ordered to execute the QDRO.

      On appeal, plaintiff argues that the parties' course of

conduct for five years evidenced an intent that plaintiff was to

receive a distribution of $2800 per month from defendant's pension

net of taxes, and that the judge erred in not ordering a plenary

hearing.       Plaintiff also argues, for the first time, that she

should    not    have    to    pay    taxes       on    her    share     of   the    pension

distribution despite the existence of tax law to the contrary.

                                             4                                       A-0224-17T1
     Our standard of review requires us to give considerable

deference to the discretionary decisions of Family Part judges.

Donnelly v. Donnelly, 405 N.J. Super. 117, 127 (App. Div. 2009)

(citing Larbig v. Larbig, 384 N.J. Super. 17, 21 (App. Div. 2006)).

That is so "[b]ecause of the family courts' special jurisdiction

and expertise in family matters."    Cesare v. Cesare, 154 N.J. 394,

413 (1998).   Unlike a trial judge's fact and credibility findings,

the judge's "interpretation of the law and the legal consequences

that flow from established facts are not entitled to any special

deference."   Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div.

2007) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan,

140 N.J. 366, 378, (1995)).

     Consistent with New Jersey's "'strong public policy favoring

stability of arrangements' in matrimonial matters," where matters

in dispute in a post-judgment matrimonial motion are addressed in

a PSA, courts will not "unnecessarily or lightly disturb[]" the

agreement so long as it is fair and equitable.      Quinn v. Quinn,

225 N.J. 34, 44 (2016) (quoting Konzelman v. Konzelman, 158 N.J.

185, 193-94 (1999)); see also Pacifico v. Pacifico, 190 N.J. 258,

266 (2007) (a matrimonial agreement is enforceable so long as it

is not inequitable); Dolce v. Dolce, 383 N.J. Super. 11, 20 (App.

Div. 2006) (quoting Petersen v. Petersen, 85 N.J. 638, 642 (1981))

(PSAs are entitled to "'considerable weight with respect to their

                                 5                           A-0224-17T1
validity and enforceability' in equity, provided they are fair and

just").

     Plaintiff asserts that she has relied on receiving $2800

gross as her share of defendant's pension for more than seven

years   and,   therefore,   the    doctrine    of    laches   requires      the

perpetuation of this arrangement.          We disagree.

     As the judge stated, the PSA permitted plaintiff to withdraw

$2800 monthly from a joint bank account.         This arrangement was to

continue until a QDRO was executed to divide the pension monies.

Although paragraph 3.5 did not address the tax consequences to

either party following the execution of the QDRO, paragraph 4.4

informed that all transactions under Article III were to be non-

taxable   events,   referring     to   IRC   1041.     Pursuant   to     those

provisions, plaintiff has received $2800 monthly, free of taxes,

as her share of the pension distribution for more than seven years.

     Although the PSA requires the preparation of a QDRO to divide

the pension account, it is silent as to the tax consequences of

the division of the account under the QDRO.            Plaintiff does not

dispute that a tax liability is incurred on a pension distribution,

instead, she argues that since defendant paid the taxes on the

full distribution for so many years, she has become reliant on

that arrangement.

                                       6                               A-0224-17T1
     We agree, as did the trial judge, that defendant failed to

comply with his responsibility for drafting and submitting a QDRO

for the division of the account.       However, defendant's neglect was

to his detriment and resulted in a windfall for plaintiff.           She

has not paid any taxes on her share of the pension distribution

from June 2011 to the present time.

     The PSA does not address the tax consequences to the parties

following the entry of a QDRO.         The IRC imposes a tax liability

on pension distributions.   Under the circumstances present here,

we are satisfied the trial judge's determination that each party

be responsible, going forward, for the tax owed on their respective

shares of the pension distribution is a fair and just reading of

the PSA.

      Although defendant was dilatory in the preparation of the

QDRO, plaintiff did not pursue the division of the account either.

Instead, she collected a tax-free share of the pension for more

than seven years.    The equities favor the conclusion that the

gross distribution paid to plaintiff of $2800 is subject to the

requisite imposition of taxes.

     We discern no abuse of discretion in the judge's denial of a

plenary hearing, and we decline to address plaintiff's argument

that the trial court could have entered an order contrary to

                                   7                            A-0224-17T1
existing tax laws as it was not raised to the trial court.     See

Selective Ins. Co. of Am. v. Rothman, 208 N.J. 580, 586 (2012).

    Affirmed.

                               8                          A-0224-17T1