Palaia v. Palaia

Decision Date14 February 2018
Docket NumberIndex No. 13372/97,2016–00943
Citation71 N.Y.S.3d 131,158 A.D.3d 719
Parties Antonia PALAIA, appellant, v. Vincent PALAIA, respondent.
CourtNew York Supreme Court — Appellate Division

McGovern, Connelly & Davidson, New Rochelle, N.Y. (Frank H. Connelly, Jr., of counsel), for appellant.

Albert J. Pirro, Jr., White Plains, NY, for respondent.

MARK C. DILLON, J.P., JOHN M. LEVENTHAL, HECTOR D. LASALLE, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

Appeal from an order of the Supreme Court, Westchester County (Janet C. Malone, J.), dated December 4, 2015. The order, insofar as appealed from, granted those branches of the defendant's motion which were, in effect, for determinations that, pursuant to the parties' stipulation of settlement dated August 22, 1997, which was incorporated but not merged into a judgment of divorce dated October 9, 1997, the plaintiff was entitled to a 50% share of the value of one of his 401(k) accounts as of the date of the execution of the stipulation of settlement, and was not entitled to any share of the value of his supplemental employee retirement plan, and denied the plaintiff's cross motion to enforce the stipulation of settlement by directing the defendant to pay her a 50% share of the value of the subject 401(k) account and the supplemental employee retirement plan as of the date of his retirement, with interest at the statutory rate from the date of his retirement.

ORDERED that the order is modified, on the law, (1) by deleting the provisions thereof granting those branches of the defendant's motion which were, in effect, for determinations that, pursuant to the parties' stipulation of settlement, the plaintiff was entitled to a 50% share of the value of the subject 401(k) account as of the date of the execution of the stipulation of settlement, and was not entitled to any share of the value of his supplemental employee retirement plan, and substituting therefor provisions denying those branches of the defendant's motion, and (2) by deleting the provisions thereof denying those branches of the plaintiff's cross motion which were to enforce the stipulation of settlement by directing the defendant to pay her a 50% share of the value of the subject 401(k) account and the supplemental employee retirement plan as of the date of his retirement, and substituting therefor provisions granting those branches of the plaintiff's cross motion; as so modified, the order is affirmed insofar as appealed from, with costs to the plaintiff.

The parties were divorced by judgment dated October 9, 1997. They had entered into a stipulation of settlement dated August 22, 1997, which was incorporated but not merged into the judgment of divorce. The stipulation provided, in relevant part, that the defendant had a 401(k) account "with a value as of 12/31/96 of $77,146.00; the [plaintiff] shall be entitled to one half of the aforesaid sum under a Qualified Domestic Relations Order to be prepared by the [plaintiff]'s attorney." The stipulation further provided that the defendant had a supplemental employee retirement plan (hereinafter SERP), and that the plaintiff "shall be entitled to one half of the value of said plan as of 12/31/96 under a Qualified Domestic Relations Order to be prepared by the [plaintiff]'s attorney."

In 2002, the Supreme Court entered a qualified domestic relations order (hereinafter QDRO). The QDRO stated that "[t]he parties consent to the submission of this order to the Court," and it was signed by the court and the attorneys for both parties. As relevant, the QDRO provided that the plaintiff would be entitled to a portion of the accumulation of assets in the subject 401(k) account and SERP, based on a Majauskas -type formula (see Majauskas v. Majauskas, 61 N.Y.2d 481, 474 N.Y.S.2d 699, 463 N.E.2d 15 ). The QDRO provided that those benefits were to be paid to the plaintiff in a "lump sum" upon the actual retirement of the defendant.

In 2014, the defendant moved, inter alia, in effect, for a determination that, pursuant to the stipulation of settlement, the plaintiff was entitled to a 50% share of the value of the subject 401(k) account as of the date of the execution of the stipulation of settlement. He also contended that the plaintiff was entitled to a 50% share of the value of the SERP as of the date of the execution of the stipulation of settlement, and that, since the SERP had no value on the date of the execution of the stipulation of settlement, the plaintiff was not entitled to any portion of the SERP. He also argued that the SERP was not marital property subject to distribution. The plaintiff cross-moved to enforce the stipulation of settlement by directing the defendant to pay her a 50% share of the value of the subject 401(k) account and the SERP as of the date of his retirement, with interest at the statutory rate from the date of his retirement on March 1, 2014. In the order appealed from, the Supreme Court granted those branches of the defendant's motion, and denied the plaintiff's cross motion. The plaintiff appeals.

"A stipulation of settlement is a contract, enforceable according to its terms" ( Stein v. Stein, 130 A.D.3d 604, 605, 12 N.Y.S.3d 284 ; see Klein v. Klein, 134 A.D.3d 1066, 1068, 22 N.Y.S.3d 547 ). Where a stipulation of settlement is susceptible of differing interpretations and is thus ambiguous, a court is "entitled to rely upon the language of the entire agreement and the circumstances surrounding its execution in construing the provision" ( Noren v. Babus, 144 A.D.3d 762, 764, 41 N.Y.S.3d 94 ; see Springer v. Springer, 125 A.D.3d 842, 843, 1 N.Y.S.3d 830 ; Kurtz v. Johnson, 54 A.D.3d 904, 905, 865 N.Y.S.2d 242 ).

Here, the stipulation of settlement, which provides that "the [plaintiff] shall be entitled to one half of the value of [the SERP] as of 12/31/96 under a Qualified Domestic Relations Order," is ambiguous. On the one hand, since the SERP, by definition, did not fund until the date of the defendant's retirement, and had a zero balance as of December 31, 1996, that language could be construed to mean that the plaintiff's share of the SERP was one-half of zero, entitling her to nothing. On the other hand, that language could be construed to mean that the plaintiff was to receive a rough Majauskas share of the SERP upon the defendant's eventual retirement, pursuant to a QDRO, based on the length of the parties' marriage to a December 31, 1996, cut-off. Indeed, the plaintiff and the defendant each advocate these competing interpretations here.

Courts must interpret matrimonial stipulations of settlement using the standards of contract interpretation (see Rainbow v. Swisher, 72 N.Y.2d 106, 109, 531 N.Y.S.2d 775, 527 N.E.2d 258 ; Kraus v. Kraus, 131 A.D.3d 94, 100, 14 N.Y.S.3d 55 ; Penavic v. Penavic, 88 A.D.3d 671, 672, 930 N.Y.S.2d 634 ). A QDRO can only convey rights agreed upon by the parties in their underlying stipulation of settlement (see McCoy v. Feinman, 99 N.Y.2d 295, 304, 755 N.Y.S.2d 693, 785 N.E.2d 714 ; Kraus v. Kraus, 131 A.D.3d at 100, 14...

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    ...language of the entire agreement and the circumstances surrounding its execution in construing the provision’ " ( Palaia v. Palaia , 158 A.D.3d 719, 720–721, 71 N.Y.S.3d 131, quoting Noren v. Babus , 144 A.D.3d 762, 764, 41 N.Y.S.3d 94 ; see Driscoll v. Driscoll , 45 A.D.3d 723, 847 N.Y.S.2......
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