Division of Pension Benefits in Maryland Divorces

usa-dollar-bills-1431130-mProperty division in Maryland divorce cases concerns not just tangible items that were used during the marriage, but also property that accrued during the marriage, such as investments and pension benefits. In a 2009 appellate case, the Maryland Court of Special Appeals considered whether an ex-husband should be required to pay his ex-wife $19,936 in pension arrears. The case arose after a husband and wife entered into a Separation Agreement that was incorporated into the Judgment of Absolute Divorce.

Under the terms of the agreement, the husband was required to pay part of his pension to the wife. The amount was calculated by multiplying 40% times a fraction. The numerator of the fraction was the number of years the parties were married during which the pension accrued and the denominator was the total number of years in which the husband had accrued the pension. The resulting figure was to be multiplied by the total amount of the pension. The divorce judgment permitted the court to keep jurisdiction for purposes of modifying the order after a Qualified Domestic Relations Order was issued.

Eleven years later, the ex-husband retired from his company at age 62. He started to receive his pension, but did not let his ex-wife know.

The ex-wife had expected him to retire at age 65 and only later learned he had retired early. Accordingly she prepared and submitted a QDRO in order to get the pension benefit payments as agreed upon in the Separation Agreement. The court entered the QDRO, which was jointly executed by the parties. However, the pension plan administrator rejected it and another had to be prepared, signed and entered. The ex-wife started to receive pension benefits.

The QDRO had not mentioned her claim to pension arrears accumulated before the filing of the QDRO. Accordingly, she filed a complaint asking for $24,515.93 in pension arrears. The ex-husband opposed her complaint. He filed a motion for summary judgment argued the Separation Agreement was a contract under seal and therefore a 12-year-statute of limitations applied. The ex-husband further argued that the ex-wife’s cause of action began accruing on the date the Separation Agreement was executed.

The summary judgment motion was denied. At trial, both parties testified. They shared two children, but the ex-wife testified she did not communicate with the ex-husband and that he rarely saw their kids. She first learned about her ex-husband’s retirement when her ex-husband retained an attorney to access the pension payments. The husband testified that both parties knew he could retire from the job any time after 30 years of employment and that he had not concealed the information of his retirement from his ex-wife.

At the end of the trial, the judge found that the ex-husband had failed to notify his wife. He also found that the Separation Agreement gave the ex-wife a share of the pension benefits. The judge ruled it was reasonable for the wife to file her action once the husband was 65 and that her cause of action accrued as of that date.

The husband appealed the trial court’s award to the wife. He argued that the trial court had used the wrong date to start the clock for the statute of limitations. It was also argued the trial court should have addressed his waiver and laches arguments.

The appellate court explained that the trial court could implicitly reject a summary judgment motion without expressly identifying the reasons. The appellate court considered when the statute of limitations began to run by looking at prior case law. It also reasoned that the Separation Agreement, incorporated into the divorce judgment, bound the ex-husband to pay “if, as, and when” he received the pension benefits. The ex-wife had taken the appropriate steps: filed a petition and gotten an order enforcing the divorce decree as to unpaid installments that had become due in the prior 12 years.

The appellate court explained it would be unjust to rule otherwise since divorce judgments are often entered decades before the pension is payable. The court also found that the ex-husband’s laches and waiver argument were not appropriate. It affirmed the lower court.

If you have decided to divorce, contact an experienced Maryland family law attorney for representation. Our office may be able to help you through this difficult time.

More Blogs:

What is the Maryland “Bangs” Formula, Maryland Divorce Lawyer Blog, October 24, 2013

Limited Divorce in Maryland, Maryland Divorce Lawyer Blog, September 17, 2013

 

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