| Osorio v Osorio |
| 2011 NY Slip Op 04646 [84 AD3d 1333] |
| May 31, 2011 |
| Appellate Division, Second Department |
| Debra Holden Osorio, Appellant, v Joseph Osorio,Respondent. |
—[*1] Robert G. Schneider, Yonkers, N.Y., for respondent.
In a matrimonial action in which the parties were divorced by judgment dated November 12,1994, the plaintiff appeals from an order of the Supreme Court, Rockland County (Garvey, J.),dated February 25, 2010, which granted the defendant's motion, in effect, for a pro rata share ofthe plaintiff's pension which she received from Lucent Technologies, Inc., and the portion thereofwhich the plaintiff received as a result of her election to take an early retirement incentive fromher employer, denied, without prejudice, as premature, that branch of her cross motion whichwas, in effect, for a share of the defendant's non-tier 1 railroad retirement benefits, and deniedthat branch of her cross motion which was, in effect, for a share of the defendant's tier 1 railroadretirement benefits.
Ordered that the order is modified, on the law, by deleting the provision thereof denying,without prejudice, as premature, that branch of the plaintiff's cross motion which was, in effect,for a share of the defendant's non-tier 1 railroad retirement benefits; as so modified, the order isaffirmed, without costs or disbursements, and the matter is remitted to the Supreme Court,Rockland County, for further findings of fact, a determination of the plaintiff's share of thedefendant's non-tier 1 railroad retirement benefits in accordance with the terms of the parties'stipulation of settlement of the divorce action, and the entry of an appropriate qualified domesticrelations order.
The parties were married on October 11, 1980, and the plaintiff commenced a divorce actionon May 10, 1993, after 12½ years of marriage. On October 11, 1994, the parties enteredinto a stipulation of settlement, which was incorporated but not merged into their judgment ofdivorce. The stipulation provided, in pertinent part: "[T]he parties, both through theiremployment have pension plans. [The defendant] through the U.S. Railroad Retirement Board,and [the plaintiff], directly through the [AT&T] Plan. Each party will receive a fifty per cent[sic] interest of the other party's defined pension plan as accrued during the course of themarriage pursuant to the so-called Majauskas Formula."
The plaintiff's employment with AT&T was terminated on January 13, 1996, and herparticipation in the AT&T pension plan terminated. On April 22, 1998, the plaintiff wasemployed by Lucent Technologies, Inc. (hereinafter Lucent), and enrolled in the Lucent pensionplan, which carried over her pension credits from AT&T. In June 2001 the plaintiff accepted anearly retirement incentive, and received five years of additional service credit.
The defendant moved for a determination of "the amount that the defendant is to receivefrom the plaintiff's pension in a Qualified Domestic Relations Order." In his motion, thedefendant claimed that the plaintiff retired on July 13, 2001, without informing the defendant thatshe had retired.
The plaintiff claimed that the pension benefits she received from Lucent were "separate anddistinct from the A.T.& T. plan." She further claimed that the five-year credit to her pension wasdependent on three factors: (1) the predivorce factor that she was employed by AT&T onDecember 1, 1983, (2) the postdivorce factor that her employment with AT&T was terminated onJanuary 13, 1996, and (3) the postdivorce factor that she started work at Lucent on April 22,1998. The plaintiff's Lucent pension was covered by a mandatory portability agreement betweenLucent and AT&T, which provided for "mutual recognition of service credit and transfer ofbenefit obligations for certain employees who leave one interchange company and are lateremployed by another interchange company."
The plaintiff cross-moved for a determination of her share of the defendant's pension planswith the employer "N.J. Transit," and the entry of a qualified domestic relations order(hereinafter QDRO) with respect to the defendant's pension plans. She claimed that "allretirement benefits owned by the defendant" should be included. In opposition, the defendantsubmitted material from the Railroad Retirement Board, which noted that the defendant'sretirement benefits included a "Tier 1 railroad retirement benefit component," which was "notsubject to division" in the case of a divorce, and tier II benefits, a supplemental annuity, and"dual benefits," which were subject to division in the case of a divorce. The defendant claimedthat his deferred compensation plan was not covered by the terms of the stipulation of settlementbecause it was not a pension.
In the order appealed from, the Supreme Court concluded that the defendant was entitled to ashare of the plaintiff's pension from Lucent, and "should receive his pro rata share of theenhanced retirement which was awarded to [the] Plaintiff." The Supreme Court, inter alia, deniedthat branch of the plaintiff's cross motion which was, in effect, for a share of the defendant's tier1 railroad retirement benefits, on the ground that tier 1 retirement benefits are similar to socialsecurity payments and, thus, are not subject to equitable distribution. The Supreme Court denied,without prejudice, as premature, the remainder of the cross motion on the ground that thedefendant had not yet retired, and was not receiving pension benefits.
Although the plaintiff started working for Lucent in 1998, well after the marriage terminated,her Lucent pension gave her credit for her service to AT&T during the marriage. The fact that theplaintiff's employer was Lucent, not AT&T, was not relevant on these facts, since pension rightswhich accrued during the marriage at AT&T were transferrable to Lucent. Marital property mayinclude all assets "earned in whole or in part during the marriage" (DeLuca v DeLuca, 97NY2d 139, 143 [2001]; see Olivo v Olivo, 82 NY2d 202, 210 [1993]). Althoughpayments made as an "incentive to continued employment" postdivorce are generally consideredseparate property not subject to equitable distribution (DeLuca v DeLuca, 97 NY2d at145), the early retirement incentive here was not an incentive to future employment. Theplaintiff's eligibility was dependent in part upon predivorce conditions, and her service to AT&Tduring the marriage. To the extent the Lucent pension was compensation for past service forAT&T during the marriage, it constituted marital property (see DeJesus v DeJesus, 90NY2d 643, 652 [1997]; cf. Wade v Steinfeld, 15 AD3d 390 [2005]; Valachovic vValachovic, 9 AD3d 659 [2004]).
The Supreme Court's determination that the defendant's tier 1 retirement benefits under theFederal Railroad Retirement Act were the equivalent of social security benefits and, thus, werenot subject to equitable distribution, was proper (see Wallach v Wallach, 37 AD3d 707,709 [2007]). Moreover, [*2]the Supreme Court properlyconcluded that the plaintiff was not entitled to a 50% share of the defendant's deferredcompensation plan under the terms of the stipulation of settlement which referred only to his"defined pension plan" (see Dreiss v Dreiss, 258 AD2d 499, 500 [1999]; see alsoMoran v Moran, 289 AD2d 544, 544-545 [2001]; cf. Bayen v Bayen, 81 AD3d 865,865 [2011]; O'Beirne v O'Beirne, 5 AD3d 572, 572-573 [2004]).
However, the Supreme Court's determination that an adjudication of the plaintiff's rightspursuant to a QDRO was premature, since the defendant was still working, and not receivingpension benefits, was incorrect. "[A]n order directing future payment of pension benefits can beprovided for in [a] qualified domestic relations order" (Pickard v Pickard, 33 AD3d 202,207 [2006]; see Kazel v Kazel, 3 NY3d 331 [2004]; Bayen v Bayen, 81 AD3d865 [2011]; Harrington v Harrington, 300 AD2d 861 [2002]; Fodrowski vFodrowski, 227 AD2d 519 [1996]).
The parties' remaining contentions either are without merit or are not properly before thisCourt.
Accordingly, the matter must be remitted to the Supreme Court, Rockland County, forfurther findings of fact, a determination of the plaintiff's share of the defendant's non-tier 1railroad retirement benefits in accordance with the terms of the parties' stipulation of settlementof the divorce action, and the entry of an appropriate QDRO. Covello, J.P., Chambers, Lott andMiller, JJ., concur.