Opinion
18-P-1306
10-09-2019
George D. SETZCO v. Donna P. CINA.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The wife appeals from that part of the June 22, 2018 judgment of divorce nisi which assigned the marital portion of the husband's interest in his Massachusetts State Employees Retirement System Pension Plan (pension). The wife argues that the Probate and Family Court judge abused her discretion by deciding to assign the marital portion of the pension benefit on an "if and when" basis, as opposed to immediately assigning the wife her portion of the net present value. In the alternative, the wife argues that, as crafted, the "if and when" assignment fails to adequately protect her right (as agreed in the parties' separation agreement) to receive one-half of the pension benefits that accrued during the marriage. Although we discern no abuse of discretion in the judge's assignment of the pension benefit, we conclude that the judgment requires amendment as it pertains to the postretirement survivor benefits and clarification of the preretirement provision. See note 3, infra.
"A judge has broad discretion when ... dividing marital assets pursuant to G. L. c. 208, § 34." Heins v. Ledis, 422 Mass. 477, 480-481 (1996). "As long as the judge's findings show that all relevant factors in § 34 were considered, and the reasons for the judge's conclusion are apparent and flow rationally from the findings and rulings, a judge's determination on the equitable division of marital property will not be disturbed." Williams v. Massa, 431 Mass. 619, 631 (2000). However, where the division of pension benefits is at issue, the court has stated that "the present assignment of a percentage of the present value of the future pension benefits is the preferable approach" when certain conditions are present, Dewan v. Dewan, 399 Mass. 754, 757 (1987), namely, the present value is not speculative, the pension plan does not have specific provisions which favor an "if and when" division, the employee spouse has sufficient assets available at the time of divorce, and a present division will not cause "an undue hardship on either spouse." Id. at 756, 757, quoting Holbrook v. Holbrook, 103 Wis. 2d 327, 340 (Ct. App. 1981). A present assignment in such situations is preferred because "[i]t provides an immediate settlement of the pension distribution problem and it avoids continued strife and uncertainty between the parties." Dewan, supra at 757, and cases cited.
Here, the parties entered into a separation agreement that resolved all issues between them except for the assignment of the husband's pension. More specifically, the parties agreed that the wife would receive a "one-half share of [the h]usband's Mass. Pension benefits that accrued during the marriage," but they did "not agree as to how such one-half share will be assigned. Accordingly, the parties [requested] that the Court resolve how that one-half share will be assigned based upon the representation of counsel and the submission of proposed judgments." The husband's position was that it would be a hardship for him to make present payment of the wife's half of the pension ($46,321) given various encumbrances on his real estate and other payments made to the wife. The wife's position was that the husband had sufficient assets to make a present division of the pension and that it was a hardship for her, unless adequately protected either by insurance or otherwise, to receive her half of the pension benefit on an "if, as and when" basis.
The parties having explicitly agreed to present to the judge the question of how to assign the pension, we are unpersuaded by the wife's argument that the judge then did not have discretion to decide to do so on an "if and when" basis. See Canisius v. Morgenstern, 87 Mass. App. Ct. 759, 771 (2015) (judge has discretion to divide future stream of income on "if and when received" basis). Moreover, although the judge's rationale for her order was brief and did not explicitly find that a present division of the pension would cause an undue hardship on either party, it can be inferred from the judge's references to the encumbrances on the husband's properties that she concluded a present assignment would work an undue hardship on the husband.
"The parties stipulated that the Wife would receive one half (1/2) of the Husband's retirement from the Date of Marriage until the entry of the Judgement Nisi. This Court declines to order the Husband to encumber his property to satisfy the obligation prior to Husband's retirement. The Wife's benefit is protected by the required life insurance policy the Husband has been ordered to obtain."
The wife argues in the alternative that, even if the judge properly exercised her discretion in assigning the pension on an "if and when" basis, the terms of the assignment constituted an abuse of discretion. More specifically, the wife argues that, as crafted, the "if and when" assignment fails to ensure that the wife will in fact receive at least $46,321 (half of the net present value of the pension benefit to which the wife was entitled) as agreed in the parties' separation agreement.
To begin with, we note that unlike many other cases, the parties here do not disagree as to the amount the wife is to receive. Counsel for the husband explicitly stated during oral argument that the husband agrees that, based on the separation agreement, the wife is entitled to receive at least $46,321 from his pension benefit regardless of the timing of his retirement or his death, or any pension option elections he may make or beneficiaries he may designate. Thus, the sole question is whether the language of the divorce judgment adequately reflects and protects the wife's entitlement both with respect to preretirement and postretirement survivor benefits.
According to husband's counsel, the amount may be more depending on cost-of-living adjustments or other factors.
As to the preretirement benefit, the judgment adequately protects the wife's entitlement in three ways. First, it requires that the wife be named "the beneficiary of the preretirement survivor annuity under Option D if eligible." Second, if the wife is ineligible for the Option D annuity, the judgment requires that she be named "beneficiary for 50% of the [husband's] contribution from Date of Marriage through Date of the Divorce Nisi." Third, should the husband remarry, he is required to name the wife as beneficiary of his employer-provided life insurance in the amount of $50,000 in case she does not receive the preretirement survivor benefit. Contrary to the wife's assertion, the plain language of this order is sufficiently clear and binding. See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 566 (1997). Moreover, it is similar to what the wife herself requested. We see no abuse of discretion in the judge's assignment of the preretirement survivor benefit or in the mechanisms designed to protect the wife's interest in it.
On remand, the judge should clarify this language to reflect that the wife is to receive "fifty percent of the benefits that accrued during the marriage (i.e., $46,321)" (as agreed in the separation agreement and reflected elsewhere in the judgment) as opposed to "contributions made," which appears to be an inadvertent linguistic discrepancy.
Husband's counsel represented at oral argument that he has complied with these provisions of the judgment.
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The postretirement survivor benefit provision of the judgment (par. 2 [d] ) stands on somewhat different footing in that it is less detailed and clear. It provides only that "Participant [husband] shall be eligible to elect an option and any eligible beneficiary at the time of retirement. Any such election shall not reduce the benefit of Alternate Payee." We note that the term "Alternate Payee" is not defined, nor does it appear elsewhere in the judgment. Likewise, the phrase "benefit of Alternate Payee" is not tied to "the one-half share of the net present value of the pension benefits that accrued during the marriage" (as required by the separation agreement) or its dollar value ($46,321).
Although the husband assures us on appeal that he understands he is required to ensure that the wife receive at least $46,321 in postretirement survivor benefits regardless of any pension elections he makes or beneficiaries he names, we are persuaded that the phrase "benefit of Alternate Payee" would benefit from clarification to that effect to preclude future disputes over its meaning. As so clarified, we see no abuse of discretion in the judge's division of the husband's pension.
For these reasons, we vacate the portions of the judgment pertaining to the wife's preretirement and postretirement survivor benefits and remand for clarification of those portions of the judgment consistent with this memorandum and order. In all remaining respects, the judgment is affirmed.
So ordered.
Vacated in Part; Affirmed in Part.