JOANNE K. SNYDER VS. HOWARD I. SNYDER (FM-03-1076-11, BURLINGTON COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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.
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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
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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.
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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
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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.
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