Sochor v. International Business Machines Corp.

• Decision Date: 29 November 1983
• Citation: 469 N.Y.S.2d 591,60 N.Y.2d 254
• Parties: , 457 N.E.2d 696, 5 Employee Benefits Cas. 1039 Betty J. SOCHOR, Respondent, v. INTERNATIONAL BUSINESS MACHINES CORP., Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 591

469 N.Y.S.2d 591

60 N.Y.2d 254, 457 N.E.2d 696, 5

Employee Benefits Cas. 1039

Betty J. SOCHOR, Respondent, v. INTERNATIONAL BUSINESS MACHINES CORP., Appellant.

Court of Appeals of New York.

Nov. 29, 1983.

M. William Munno, Sheri Van Greenby Fanaroff, Dan F. Laney, III, New York City, and Thomas R. Behan, Kingston, for appellant.

Paul J. Goldstein and Stephen E. Ehlers, Poughkeepsie, for respondent.

OPINION OF THE COURT

JONES, Judge.

A judgment creditor-wife is not entitled in a proceeding under CPLR 5225 (subd. [b] ) to which her judgment debtor-former husband is not a party to reach his inchoate rights under a noncontributory retirement plan established by the husband's employer where the husband's entitlement to payments thereunder is dependent on his making an election among alternative benefits and then applying for payment thereof. ¹

Betty Jean Sochor obtained a default judgment against her former husband, Joseph Sochor, for support arrears in the amount of $15,858.48. She seeks in this special proceeding against International Business Machines Corp. pursuant to CPLR 5225 (subd. [b] ) (in which her former husband has not been joined) to enforce collection of that judgment.

IBM has established a Retirement Plan (Plan) for the benefit of the corporation's current and former employees. The Plan, supported only by contributions of the employer, is administered by trustees designated in the Plan.

Joseph Sochor, whose date of birth was November 17, 1923, was employed by IBM from June 15, 1942 to November 30, 1971, when he voluntarily left its employ. Under the terms of the Plan, Sochor will be eligible to receive benefits if he lives to age 65 and makes the required application for benefits to IBM's payroll benefits department. In the alternative, as a former employee who has completed 15 years of continuous service and has reached age 55, he is now eligible to receive reduced monthly benefits if he so elects and makes the required application. Such an early election additionally will require a choice among more than a dozen separate payment options, which choice will irrevocably affect the amount of benefits available to the recipient. The amount of the benefits may also vary depending on whether he is single or married on the date payment of benefits commences. ² No part of the assets held by the trustees under the Plan is designated or apportioned for the benefit of any current or former employee unless and until benefits become payable to him. The Plan also provides that benefits are not "subject to alienation, sale, transfer, assignment, pledge, attachment, garnishment, lien, levy or like encumbrance", or subject to the "debts or liabilities of any person entitled to benefits under the Plan".

It is undisputed that Joseph Sochor has made no election of benefits under the Plan, has filed no application for benefits, and has not reached age 65.

At the threshold we observe that the only entity made a party to this proceeding by the wife is IBM, the corporate employer. Inasmuch as all the assets of the Plan are held by its trustees (who comprise a separate legal entity) rather than by the corporation, there is serious question whether in the event of a determination on the merits favorable to her in this proceeding, the wife could enforce such determination against the corporation (CPLR 5201, subd. [c], par. 2). It is not necessary to resolve this issue, however, inasmuch as we conclude that the wife must fail on the merits.

The gravamen of her claim is that, within the contemplation of CPLR 5225 (subd. [b] ), ³ the corporation is "in possession or custody of money or other personal property in which the judgment debtor has an interest" ⁴ which is reachable by virtue of the provision of CPLR 5201 (subd. [b] ). ⁵ The resolution of this claim turns on the nature of the husband's interests under the Retirement Plan, which must be determined by reference to the terms of the Plan itself. Legal analysis in this instance is not advanced by resort to the "vesting" terminology of pension plan law.

No provision is made for the allocation of any portion of the assets of the Plan to or for the account of any employee. The rights of the employees are only to receive payments from the assets of the Plan generally in specified amounts on meeting the requirements set forth in the Plan. These requirements may be classified under two headings, eligibility and right to receive payments. The husband here has met the eligibility requirements, that is, he completed more than 15 years of continuous service before he left IBM's employ in 1971 and he has now reached age 55. Accordingly, he is eligible to elect to take early retirement reduced benefits and then to make application for payment thereof. His right to receive payment of benefits under the Plan, however, depends both on his making an election to receive early retirement reduced benefits (and, if so, to choose among the several optional modes of payment of such benefits) and on his filing an application therefor as specified by the terms of the Plan. If he makes no such election and application before he reaches age 65 in November, 1988, he will become eligible at that time for normal retirement benefits, but again he will be entitled to receive such benefits only if he makes application therefor in the manner specified in the Plan. If the husband were to step up in person now, without election and application, he would be entitled to no payment from the trustees of the Plan. Indeed, it appears that if the husband dies without having made application for benefits, neither he nor his estate will receive any benefits. ⁶ Accordingly, under the provisions of the IBM Retirement Plan Joseph Sochor has no proprietary interest which can be reached by his former wife under C PLR 5225 (subd. [b] ) unless and until he makes an election and application to receive retirement benefits. ⁷

In this proceeding, to which the husband is not a party, the courts have no authority to compel him to make an election or to file an application for early retirement benefits, or, in the alternative, to make such election or to file such application on his behalf. The Plan provides expressly for the exercise of election rights by a "former employee" or a "participant" only. The rights granted to a former employee are personal to him and may neither be exercised nor forfeited in any proceeding to which the affected employee is not a party. Even if the making of the application required by the terms of the Plan were to be characterized as ministerial, the election between benefits at age 65 and reduced benefits at age 55 (together with the choice among multiple options in the latter case) involves decisions of substance beyond the power of the court to make in this proceeding. ⁸

The cases on which the Appellate Division, 90 A.D.2d 442, 457 N.Y.S.2d 317, relied do not support the conclusion reached by it. For example, in Alt v. Long Is. R.R. Co., 81 Misc.2d 99, 365 N.Y.S.2d 480, affd. 54 A.D.2d 724, 387 N.Y.S.2d 610) the court, in declaring the rights of employees under a substituted pension plan, merely held that "[i]t is not until retirement age...