Parsons v. Parsons

• Decision Date: 16 March 2022
• Docket Number: 786 WDA 2021
• Parties: RICHARD W. PARSONS v. KATHLEEN M. PARSONS Appellant
• Court: Pennsylvania Superior Court

RICHARD W. PARSONS v. KATHLEEN M. PARSONS Appellant

No. 786 WDA 2021

Superior Court of Pennsylvania

March 16, 2022

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

Appeal from the Order Dated June 8, 2021 In the Court of Common Pleas of Potter County Civil Division at No(s): 2015-5075

BEFORE: LAZARUS, J., SULLIVAN, J., and PELLEGRINI, J. ^[*]

MEMORANDUM

PELLEGRINI, J.

Kathleen M. Parsons (Wife)^[1] appeals an order of the Court of Common Pleas of Potter County (trial court) rescinding an order concerning the distribution of interests in the pension of her now ex-husband, Richard W. Parsons (Husband), a retired postal worker. In sum, Husband and Wife entered a Separation Agreement on June 14, 2019. Then, on August 17, 2019, they each signed a Court Order Acceptable for Processing (COAP) which implemented that Separation Agreement.

On August 25, 2020, the trial court entered an order clarifying that according to the COAP, Wife was entitled to a survivorship benefit. Husband had agreed to the clarification, but he later disputed the order on the ground that it reduced his non-marital interest in the pension. On June 8, 2021, the trial court rescinded its earlier clarification order and the COAP recognizing Wife's survivorship rights. Wife now argues that the trial court had no authority to vacate the clarification order and the COAP once they became final. We find merit in Wife's position, vacate the order of June 8, 2021, and reinstate the clarification order and the COAP.

I.

The specific property right at issue in this appeal concerns Wife's entitlement to a survivorship interest in Husband's pension. It is undisputed that under the original Separation Agreement, the parties agreed that Wife would receive a 55% share in the marital portion of Husband's pension, and that she would "have the right to designative survivors" who would be entitled to her share of the pension benefits if she predeceased Husband:

5. The parties agree that the marital portion of husband's pension with the limited United State Postal Office is in the amount of $547, 273.76. Wife will receive a 55% interest in the same, together with 55% of any forthcoming costs of living adjustments. It is further agreed that wife will have the right to designate survivors as to her benefits, which will, however be her children.

Separation Agreement, 6/14/2019, at Paragraph 5 (emphasis added).

The COAP was entered on August 6, 2019, and it set forth Husband and Wife's respective retirement benefits. Paragraph 7 of the COAP provided that Wife "is entitled to 35.772% of [Husband's] annuity[.]"^[2] The COAP provided further in Paragraph 7 that Wife would be awarded a "Former Spouse Survivor Annuity" pursuant to federal law:

Under Section 8341(h)(1) of Title 5, United States Code, [Wife] is awarded a Former Souse Survivor Annuity under the Civil Service Retirement System, in the same amount to which [Wife] would have been entitled if the Divorce had not occurred. She is to continue as beneficiary of the Civil Service Retirement System survivor annuity to which she was entitled at the time of Divorce.

COAP Enabling Order, 6/19/2019, at Paragraph 7 (emphasis added).

Finally, the COAP provided in Paragraph 9 that if Wife predeceased Husband, her interest would be divided equally among her surviving children:

[Wife] shall commence her benefits as soon as administratively feasible following the date this Order is approved as a Court Order Acceptable for Processing by [the United States Office of Personnel Management (OPM)]. Payments shall continue to the Former Spouse for the remainder of [Husband's] life-time. However, in the event that [Wife] dies before [Husband], OPM is directed to pay [Wife's] share of the [pension] benefits to the surviving children of the marriage, in equal shares.

Id. at Paragraph 9 (emphasis added).

The record is vague on whether or to what extent Wife ever received the survivor benefits outlined in the COAP once it was entered. No precise monetary values have been assigned to Wife's interest in the pension or to the costs of the benefits now in dispute. However, Husband testified that he had successfully contacted his pension processor to ensure that Wife would not receive survivor benefits because he was told the benefit was optional and he wanted to avoid the associated costs. See Trial Court Hearing, 6/8/2021, at pp. 30-31, 34-35, 37.

On July 17, 2020, Wife filed a petition seeking to clarify her interests in the pension in the event that she or Husband predeceased the other.^[3] At the August 25, 2020 hearing on that petition, Wife's counsel, Husband and the trial court discussed the proposed clarification of the Separation Agreement and the COAP:

Wife's Counsel: In Paragraph 5 [of the Separation Agreement, it] indicates that ["the] parties agree that marital portion of husband's portion wife is to receive 55 percent interest in the same together with 55 percent of any forthcoming cost of living adjustment. [sic] it is further agreed that wife will have the right to designate survivors as to the benefits which will, however, be her children.["] Your Honor, the parties agree that in the Court language of division of the marital portion of husband's pension that the Court intended to include survivorship benefits.

Trial Court: That is correct.

Wife's Counsel: Unfortunately under the [COAP] that was prepared and signed by all 2 parties that does refer to the, in Paragraph 7, does refer to the survivorship benefits but not in the [Separation Agreement]. Now, under the pension rules they will not consider any order modifying the original order or clarifying the order in such a way as to establish a new right. It is our position that [under Section 8237 of the administrative Federal Administrative Code A[, ] unless the Court order acceptable for processing expressly provides otherwise, the former spouse's share of the employee's pension terminates on the last day of the month before the death of the former spouse and former spouse's share of the employee's annuity reverts back to the retiree. So what [OPM has] done [is] interpret[] that to mean that since the order, specifically the [Separation Agreement] was silent on the issue of survivorship benefits that it was intent of this court to exclude the spousal portion.

Trial Court: Even though we talked about it in the [COAP]?

Wife's Counsel: Even though we talked about it in the [COAP]. Their position is the [COAP] does not supersede the [Separation Agreement]. Accordingly, Your Honor, we cannot under the regulations establish a new right, but we're not asking for a new right we're asking for the court to clarify an existing right under the [Separation Agreement], and we're asking the Court to do so by including the language that it was the intent of the [Separation Agreement] of June 14th under marital portion of husband's pension to expressly preserve wife's [55% interest] in the survivorship benefits.

Trial Court: Okay. [Husband].

Husband: Yes, sir.

Trial Court: Any thoughts you have or any questions about that or do you take issue with that?

Husband: From what [Wife's Counsel] has explained to me, sir, all this does is if I die she gets survivorship, which in turn then when she passes will go to my children.

Trial Court: That's my understanding.

Husband: That's what I had signed previously, correct?

Trial Court: Yes.

Husband: What we're doing here today does not in any way change any benefits she's getting per month or anything?

Trial Court: That's my understanding as well.

Wife's Counsel: It is our understanding.

Husband: If that's the case, I'm fine with that.

Trial Court Hearing, 8/25/2020, at pp. 2-4 (emphasis added).

In sum, the parties and the trial court all understood and agreed on August 25, 2020, that it had always intended for the Separation Agreement and the COAP to grant Wife survivorship benefits. Husband stated that this was his intent, and he would agree to the clarification as long as it did not increase Wife's monthly benefit or affect his own pension benefits. See id. The parties both wanted to ensure that their children could be designated beneficiaries of the pension in the event that Husband or Wife predeceased the other.

The Separation Agreement was then clarified, with mutual consent of the parties, that Wife would receive a survivorship benefit in her share of the pension. The clarification order reads:

AND NOW, this 25th day of August 2020, by way of clarification of the Order of June 14th, 2019, it was and remains the Court's intention to establish a right of survivorship as to wife's 55 percent share in the event that husband should predecease her. That was the Court's intention at the time the original Order was entered. This clarification creates no new rights in any party nor is it intended to modify the intent of the original Order.

Clarification Order, 8/25/2020, at 1 (emphasis added).

Although the parties believed at the time the clarification order was entered that it would have no effect on Husband's pension benefits, his monthly payments decreased by some unspecified amount once the survivorship benefit was implemented. Husband then sought to have the clarification order rescinded because he agreed to recognize Wife's survivorship rights only as long as doing so would result in no additional costs for him.

Husband filed a petition to enforce the Separation Agreement and a hearing was held on June 8, 2021.^[4] Initially, the trial court admitted to being "hung up on"' the fact that the clarification order had been entered ten months prior at that point, and "there was no appeal taken here." Trial Court Hearing, 6/8/2021, at p. 6. The trial court also emphasized that both parties had previously accepted the...