| Hess v Wojcik-Hess |
| 2011 NY Slip Op 06006 [86 AD3d 847] |
| July 21, 2011 |
| Appellate Division, Third Department |
| Eric R. Hess, as Executor of Robert C. Hess, Deceased,Respondent-Appellant, v Karen J. Wojcik-Hess, Appellant-Respondent, et al.,Defendant. |
—[*1] Higgins, Roberts, Beyerl & Coan, Schenectady (Michael E. Basile of counsel), forrespondent-appellant.
McCarthy, J. Cross appeals from a judgment of the Supreme Court (Kramer, J.), entered May20, 2010 in Schenectady County, which, among other things, granted plaintiff's motion forsummary judgment.
Robert C. Hess (hereinafter decedent) and defendant Karen J. Wojcik-Hess (hereinafterdefendant) were married in 1993. In the separation agreement they signed in 2006, defendantwaived any claim or interest in decedent's retirement savings and pension plans. One year later,decedent died.
Prior to his death, decedent had not designated any individual as the beneficiary of hissavings and security program account or personal pension account with his employer, defendantGeneral Electric Company (hereinafter GE). Upon his death, GE began to distribute the proceeds[*2]of those accounts to defendant. Plaintiff, upon beingappointed executor of decedent's estate, requested that defendant turn over the proceeds of theaccounts to the estate. When she refused, plaintiff commenced this action against defendant andGE seeking the proceeds of the accounts, asserting that defendant breached the separationagreement and was unjustly enriched.
GE removed the case to federal court asserting federal question jurisdiction in that the matterwas controlled by the Employee Retirement Income Security Act of 1974 (29 USC § 1001et seq. [hereinafter ERISA]). In resolving multiple motions, the United States DistrictCourt for the Northern District of New York (Sharpe, J.) determined that GE was required underERISA to distribute the account funds to defendant. The court also denied defendant's motion todismiss plaintiff's state law claims, denied plaintiff's motion for summary judgment on thoseclaims and remanded the state law claims to Supreme Court (Hess v Wojcik-Hess, 2010WL 396284, *5, 2010 US Dist LEXIS 6168, *15-16 [ND NY 2010]). On remand, SupremeCourt granted plaintiff's motion for summary judgment, granted him injunctive relief preventingdefendant from disposing of the proceeds that she received or will receive from the accounts, anddirected defendant to turn over all proceeds of the accounts to plaintiff. The court did not awardplaintiff counsel fees.[FN1]Defendant appeals and plaintiff cross-appeals.
The doctrine of law of the case precluded defendant from relitigating the issue of preemptionin Supreme Court because District Court had already denied her motion to dismiss the complaint,wherein she argued that plaintiff's causes of action were preempted by ERISA. In SupremeCourt, defendant argued that the law of the case applied such that the court was required toadhere to the determination of District Court, thereby mandating denial of plaintiff's motion forsummary judgment.[FN2]While we acknowledge that the law of the case doctrine does not bind this Court to decisionsrendered by District Court (see Martin v City of Cohoes, 37 NY2d 162, 165 [1975]),defendant's attempt to invoke the doctrine but limit its application to District Court's rulings inher favor is impermissible; the doctrine must be applied evenly. In denying defendant's motion todismiss, District Court necessarily rejected her federal law counterclaim that ERISA preemptedplaintiff's state law claims. Had preemption applied, the federal court would have dismissed thecomplaint rather than remanding invalid (i.e., preempted) claims to state court. Defendant had theopportunity to fully address the preemption argument in federal court—including theopportunity to appeal from the portion of District Court's decision that denied her motion todismiss (see Carlsbad Tech., Inc. v HIF Bio, Inc., 556 US —, —, 129 S Ct1862, 1866 [2009])—and she was bound by the law of the case established on that issue inthe federal court's decision (see People v Evans, 94 NY2d 499, 502-504 [2000]; Dukett v Wilson, 31 AD3d 865,868 [2006]). Thus, Supreme Court did not err in deferring to and relying [*3]on the prior ruling of District Court that denied defendant's motionto dismiss plaintiff's claims as preempted.
In the separation agreement, defendant waived her right to any portion of decedent's pensionand retirement savings accounts. Under the article of the agreement entitled "Pension," theparties acknowledged that decedent "participates in a retirement plan through his place ofemployment and has retirement savings and a pension plan under such plan." Defendant then"waive[d] any claim or interest which [s]he may have in [decedent's] retirement savings andpension plan." Under the article entitled "Mutual Releases," defendant waived all claims to "anyand all pension, profit sharing, stock options, Keogh, IRA accounts . . . or any sameor similar item or items." This waiver in the separation agreement was "explicit, voluntary andmade in good faith" (Silber v Silber, 99 NY2d 395, 404 [2003], cert denied 540US 817 [2003]), so as to preclude defendant from retaining the retirement savings and pensionplan account proceeds. While the agreement did not give the exact names of the accounts atissue, that is not required. The waiver in the agreement was sufficiently explicit in its descriptionof the accounts (see id. at 399-400; Matter of Sbarra, 17 AD3d 975, 976-977 [2005]). Contrary todefendant's testimony at her deposition that she felt that the agreement was unfair and thatdecedent had not disclosed certain financial information to her, the agreement states that bothparties have fully discussed and disclosed their financial status and believe that the agreement isfair and reasonable. She testified that she understood that she was giving up any right to claimdecedent's pension and retirement savings he had through GE. Thus, as the separation agreementcontained a valid waiver of defendant's right to the proceeds of the GE accounts, Supreme Courtproperly granted plaintiff's motion for summary judgment.
Defendant offers no evidence to support her argument that decedent intended that she receivethe proceeds of these accounts as a gift. She incorrectly stated in her testimony and pleadings thatdecedent named her as his beneficiary and then chose not to change that designation. Accordingto the record, decedent never named a beneficiary to these accounts, either before or after signingthe separation agreement. Instead, defendant was the presumptive beneficiary according to GE'splan documents because she was decedent's spouse. Decedent's inaction, namely his failure to filea form to name a beneficiary, cannot be equated with an intention to give his estranged wife theaccount proceeds, especially considering the absence of proof that decedent was aware of theneed to file such a form.
Plaintiff was not entitled to counsel fees. The separation agreement permits either party torecover counsel fees in an action to enforce the agreement, but only if the action is commencedafter a reasonable notice of default is given to the other party. This clause presumably wouldallow the opposing party to cure his or her default and avoid litigation in the first place. Plaintiffcannot recover counsel fees because there is no proof that he adhered to this condition in theagreement.
Rose, J.P., Malone Jr., Stein and Egan Jr., JJ., concur. Ordered that the judgment is affirmed,without costs.
Footnote 1: Although Supreme Court didnot address plaintiff's request for counsel fees, the court's failure to address that application isdeemed a denial (see Dickson vSlezak, 73 AD3d 1249, 1251 [2010]).
Footnote 2: Supreme Court did not apply thelaw of the case to this portion of District Court's decision, finding that District Court did notaddress plaintiff's summary judgment motion on the merits and only denied it to allow plaintiff'sstate law claims to be decided in state court upon remand.