2012 BCBA Leonhardt v. Leonhardt [ 85 Bucks Co. L. Rep. ]
580 BUCKS COUNTY LAW REPORTER

Husband appeals this Court’s Order holding that the terms of a Marital Settlement Agreement did incorporate the payment of survivor benefits under a Qualified Domestic Relations Order from Husband’s pension in the event that Husband were to predecease Wife.

Domestic relations – Marital settlement agreement – Qualified domestic relations order – Partial transfer of survivor benefits – Held, wife is entitled to survivor benefits pursuant to the marital settlement agreement.

1. When construing a marriage settlement agreement, the court must adopt that construction which gives effect to the parties’ reasonable and probable intent.

2. Bargaining pension retirement and survivor benefits in tandem, unless otherwise specified, should be considered the only reasonable result that parties to a marital settlement agreement would intend.

INTRODUCTION

Appellant Frank Leonhardt (hereinafter referred to as Husband) has filed an appeal of this Court’s Order of August 23, 2011 pertaining to a Petition for Special Relief filed by Appellee Katherine Leonhardt (hereinafter referred to as Wife). In that Order we determined that the Marital Settlement Agreement (the MSA)1 signed by the parties on August 30, 2010, although failing to include language specifically addressing the payment of survivor benefits, did, in fact, incorporate the payment to Katherine Leonhardt of survivor benefits from Husband’s pension plan in the event Husband were to predecease Wife. Husband has disputed that the language of the MSA directs payments to Wife of pension plan benefits, including survivor benefits. Based on this assertion, Husband has been unwilling to sign a Qualified Domestic Relations Order (hereafter the QDRO), as he agreed to do in the MSA. As a result, Wife filed the subject Petition for Special Relief, wherein an evidentiary hearing was conducted by this Court on June 15, 2011. Following that hearing, counsel for both parties filed memoranda of law addressing the issue.

FACTS

The parties were married on May 24, 1986 and separated on June 1, 2009. A Divorce Decree was entered on October 22, 2010. The MSA, signed by the parties and incorporated in the Divorce Decree, addressed the division of Husband’s Defined Benefit Police Pension Plan with Lower Southampton Township (hereinafter referred to as the Pension Plan). The relevant portion of the MSA reads as follows:

The parties acknowledge that Husband has an interest in a Defined Benefit Pension Plan. This is as a result of his employment with Lower Southampton Township Police Department. It is agreed between the parties that a Qualified Domestic Relations Order (QDRO) shall be drafted by legal counsel for HUSBAND to effectuate the transfer of fifty-five percent (55%) of the marital portion of the Plan from HUSBAND to WIFE. The marital portion will be defined as that time period from Husband’s date of hire with Lower Southampton Township through the date of separation, June 1, 2009. Wife is entitled to 5% of the value of this Plan during those dates.

Each of the parties agree to cooperate in providing any information and in signing any and all necessary documents in order to effectuate an orderly transfer of these monies from HUSBAND to WIFE by QDRO. Clearly the MSA is silent in addressing the inclusion or exclusion of survivor benefits to Wife.

On appeal, Husband raised the following issues in his Concise Statement of Errors Complained of on Appeal. We recite them verbatim:

1. Whether the Trial Court erred in granting Wife a benefit not negotiated or agreed to by both parties.

2. Whether the Trial Court erred by adding terms not included in the Marital Settlement Agreement when there was no ambiguity and therefore the Court was bound by the four corners of the document.

3. Whether the Trial Court erred in ordering the parties to execute a domestic relations order which is contrary to the provisions of the pension ordinance and Pennsylvania statutes.

DISCUSSION

In Husband’s first matter complained of on appeal he alleges that when he transferred a portion of his employment pension to Wife via the MSA, he never bargained to transfer to her a portion of his survivor benefits. We disagree. Pennsylvania’s appellate courts have emphasized that within the reasonable intentions presumed to exist during contract bargaining, pension benefits and pension survivor benefits are not, per se, separate and distinct entities. In deciding what terms are and are not present within a marriage settlement agreement, this Court is bound by rules of contract law. Roth v. Roth, 604 A.2d

1033 (Pa. Super., 1992). “When construing a property settlement agreement, the court ‘must adopt that construction which gives effect to the parties’ reasonable and probable intent, in view of the surrounding circumstances and purposes of the contract.” Id., at 1035, Litwack v. Litwack, 433 A.2d 514, 515 (Pa. Super., 1981).

Furthermore, Pennsylvania’s appellate courts have repeatedly found that agreeing to waive or assign rights to a spouse’s pension benefits will implicitly control one’s rights to survivor benefits arising from that pension as well. Layne v. Layne, 659 A.2d 1048, 1052 (Pa. Super., 1995); Roth, supra, 604 A.2d at 1035; see also, Kirsop v. Public School Employees’ Retirement Bd., 747 A.2d 966, 971 (Pa. Cmwlth., 2000). The appellate courts have found that as a matter of practicality, bargaining pension retirement and survivor benefits in tandem, unless otherwise specified, is the only reasonable intent that parties can have within a marriage settlement agreement. See, Layne, 659 A.2d at 1051, citing,
Roth, 604 A.2d at 1035.

In the present case, as to Husband’s and Wife’s MSA, both parties expressly acknowledged that Husband held a pension resulting from his employment with the Lower Southampton Township Police Department. The former couple further agreed that a QDRO was to be drafted by legal counsel for HUSBAND “to effectuate the transfer of fifty-five percent (55%) of the marital portion of the Plan from HUSBAND to WIFE.” This language is sufficiently specific to not only divide both parties’ rights to Husband’s pension benefits, but also the survivor benefits that may one day arise from the pension. Layne, supra, 659 A.2d at 1052. Applying this rationale to the present matter, the fact that Husband and Wife did not specifically negotiate or agree with regard to survivor benefits does not exclude such benefits from Wife’s portion pursuant to the MSA. Husband’s second issue complained of on appeal covers ground similar to the first; specifically, Husband alleges that by imposing the partial transfer of survivor benefits, we have forced Husband to give up a benefit to his former wife that was outside the unambiguous terms of the MSA. Once again, we disagree.

Even were we willing to set aside the law of this Commonwealth which instructs this Court to construe pension retirement and survivor benefits together, as discussed infra, we separately find unconvincing Husband’s claim that he never intended to bargain away survivor benefits as part of his pension. Husband’s pension plan, an 11 page document, devotes one of its 12 articles to explaining how “death benefits” are to be distributed in the event of Husband’s death. There is no readily identifiable reason why Husband should not and could not have been cognizant that these benefits were transferable to Wife, just as were his personal retirement benefits. Again, we note that both parties in this case were represented by counsel, and that the MSA specifically states that the legal effect of its provisions “have been fully explained to both parties by their respective counsel.”

Finally, this Court is instructed by the strongly analogous facts in Kirsop v. Public School Employees Retirement Board, 747 A.2d 966 (Pa. Cmwlth., 2000). In Kirsop, as well as in the present case, Husband and Wife drafted a marital settlement agreement transferring to Wife a portion of Husband’s pension benefits.  Subsequently, a qualified domestic relations order was proposed in conformance  with these terms but was not signed before the husband’s death. Id., at 967. Interpreting the marital settlement agreement, the Kirsop Court barely bothered to distinguish survivor benefits as an entity separate and distinct from pension benefits. And, as in Layne, the Court was guided by the language of the parties as evidence of their intent.

In the final matter complained of on appeal, Husband asserts that the Court erred in ordering the parties to execute a domestic relations order which he asserts “is contrary to the provisions of the pension ordinance and Pennsylvania statutes.” Needless to say, for reasons already stated, we find that Appellant’s vague, blanket assertion as to a flawed interpretation by this Court of the relevant pension ordinance and Pennsylvania statutes is wholly without merit. Notwithstanding Appellant’s failure to explain his assertion that this Court’s Order of August 23, 2011 violates a pension ordinance and Pennsylvania statutes,

we respond to what we can only presume Appellant complains of in his third issue.

2 The language of Ordinance 443; Lower Southampton Police Employee Pension Plan, at Article 5.1, directs a 50 percent payment to a surviving spouse. Likewise, the pertinent statute found at 53 P.S. §767(a)(4) requires police pensions to pass 50 percent of pension benefits to a surviving spouse. Given the first two matters complained of on appeal, we presume that Appellant’s third issue also rests on our determination that Wife is entitled to survivor benefits based on the MSA executed by the parties. We remain unclear as to how Appellant correlates that determination with a violation of the ordinance and statute, as our determination that Wife is entitled to survivor benefits is not irreconcilable with either.

CONCLUSION

Based upon our review of the relevant case law, it is apparent to this Court that survivor benefits to Wife are to be assumed from the language these parties, guided by counsel, utilized in the crafting of their MSA. Additionally, we find Husband’s assertion that this Court ordered the parties to execute a QDRO contrary to any relevant ordinance and statutory provisions to be devoid of merit.

Our decision in this matter was guided by what was right and equitable under the circumstances, and pursuant to law. We entered our Order accordingly. We respectfully submit that our August 23, 2011 Order determining Wife is entitled to survivor benefits pursuant to the MSA signed by these parties should be affirmed. Similarly, our Order requiring that the parties execute a QDRO with language that enforces the same should also be affirmed.

By the Court, /s/Gary B. Gilman, J.
[Appealed to Superior Court.]