Pallo v. Pallo (In re Marriage of Pallo)

In re Marriage of JODY L. and ROBERT J. PALLO.

JODY L. PALLO, Appellant, v. ROBERT J. PALLO, Respondent.

G058738

COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

February 1, 2021

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. 11D000767)

OPINION

Appeal from a postjudgment order of the Superior Court of Orange County, Nathan T. Vu, Judge. Affirmed.

Gary Paul Levinson; and William E. Cavanaugh for Appellant.

C&K Law Group, Christopher K. Jafari and Kiarash Jafari for Respondent.

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INTRODUCTION

When they divorced, Jody L. Pallo and Robert J. Pallo entered a marital settlement agreement (the MSA) dividing their property; the MSA was approved as a stipulated judgment by the trial court. More than six years later, Jody¹ filed a motion to set aside the stipulated judgment on the ground Robert had failed to disclose the existence of a community property asset—his pension. The trial court found that the motion to set aside was untimely, and that Jody had been aware of the existence of the pension at the time the parties entered into the MSA.

Jody appeals from the postjudgment order denying her motion. Substantial evidence supports the trial court's findings. We reject Jody's claim that the Employee Retirement Income Security Act (ERISA) preempts her waiver of a right to the pension. Therefore, we affirm the denial of the motion to set aside the judgment.

Jody's motion to set aside was made under Family Code section 2122 "on the grounds of Failure to Comply with Disclos[ure] Requirements of Chapter 9, Breach of Fiduciary Duty, Fraud, and/or as an Omitted Property Adjudication pursuant to Fam. Law Section 2556." Jody did not make a request under Family Code section 2556 that the trial court adjudicate the allegedly omitted property, and the court did not make any findings on this issue. We will not make any factual findings in the first instance on appeal. Our opinion is without prejudice to either party filing the proper request for adjudication of an omitted asset with the trial court.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

I.BACKGROUND

Jody and Robert married in 1976, and a petition for dissolution of the marriage was filed in January 2011. Their divorce was finalized in April 2012. The parties signed an MSA that became a judgment of the court. The two primary assets divided by the MSA were the parties' residence and a 401(k) account at Allergan, Robert's employer. Robert was awarded the 401(k), and Jody was awarded the residence and an equalizing payment from the 401(k). Robert was ordered to pay Jody $4,200 per month in spousal support.

Sometime before April 2014, Robert remarried.

II.THE MSA

The relevant portions of the MSA provide:

"HUSBAND shall receive as his separate property all of the items set forth below: [¶] . . . [¶] 3. Any and all community property interest in HUSBAND's Retirement/Pension/401(k) with Allergan, which shall be subject to the equalization payment and a QDRO, as described below."

"The community and/or co-owned interest in HUSBAND's Allergan Retirement/Pension/401(k) accounts shall be awarded to HUSBAND subject to the transfer of the amount of $65,000 to WIFE as her portion of the community property interest in HUSBAND's retirement account, after accounting for all equalization. If a Qualified Domestic Relations Order is necessary to accomplish this division, Richard Muir shall be appointed pursuant to Evidence Code § 730 to prepare the Qualified Domestic Relations Orders dividing any accounts including 401(k), pension and deferred compensation benefits of HUSBAND as may be required. HUSBAND shall pay the costs associated with said Qualified Domestic Relations Orders. Richard Muir shall seekapproval from the plan(s) for Qualified Domestic Relations Order and present plan approved orders to the Court without the signature of Parties or counsel. Parties shall have ten (10) days from date of service to object to the entry of the proposed order by this Court. Mr. Muir shall have the authority to account for and trace any funds related to this account, and to obtain subsequent orders for the recovery and/or division of any funds withdrawn and/or transferred after the Date of Separation." (Italics omitted.)

"Each Party warrants that neither of them is now possessed of any community property of any kind or description other than the property specified in this Agreement."

"The court shall have continuing jurisdiction to award community assets or liabilities that have not been divided in this Agreement pursuant to the provisions of California Family Code § 2556." (Italics omitted.)

"Each Party warrants that he or she has made a full and accurate disclosure to the other pursuant to the Family Code § 2100 of all assets, liabilities, and encumbrances, and their values, in which one or both Parties have or may have an interest, and each has made a full and accurate disclosure of his or her income. The Parties warrant that they have met their duty pursuant to Family Code § 2100 to update and augment that information including advising the other of any material facts that could substantially affect the value of any asset up until the time of this Agreement." (Italics omitted.)

"The Parties understand that they have a right to discovery, which includes taking depositions, submitting interrogatories, obtaining documents, requesting admissions, using subpoenas, and obtaining appraisals. They have chose[n] not to exercise any further right to discovery or conduct any investigation beyond that already performed. The Parties each understand that by failure to engage in discovery either one may not fully appreciate the full extent of the assets and debts of the Parties subject to the court's jurisdiction or the character and value of each asset and debt. Each Partyunderstands that this lack of knowledge may mean that the division of community property is not equal, that the level of support provided may be less than fully available under law, or that either one may not have received the optimum settlement to which he or she is entitled under California law."

"If a judgment of dissolution of marriage is obtained by either Party, the original of this Agreement or a copy shall be attached to the stipulated or proposed judgment. The court will be requested to (i) approve the entire Agreement as fair and equitable; (ii) order each Party to comply with all of its executory provisions; and (iii) merge the provisions of the Agreement into the court's judgment. Notwithstanding the merger of the Agreement into the judgment, the Parties expressly agree that the warranty and indemnity provisions and all executory provisions of the Agreement shall survive the merger and entry of judgment, and shall be enforceable in contract, tort, or as otherwise provided by law."

"This Agreement is intended to be the final, complete, and exclusive agreement of the Parties on the matters it covers. It supersedes any previous or contemporaneous oral or written agreements between the Parties with respect to these matters. There are no representations, warranties, promises, or agreements with respect to these matters, except as set forth in this Agreement."

III.POSTJUDGMENT MOTIONS

In April 2014, Robert filed a motion to modify spousal support downward; the parties stipulated to reduce the monthly spousal support to $3,526, and the trial court entered an order on that stipulation. Robert filed a second request to decrease spousal support in May 2018. Robert alleged a change in circumstances due to the termination of his employment from Allergan. Robert listed a pension from Allergan as his source of income. (Ultimately, the parties stipulated to reduce the spousal support to $2,500 per month.)

In September 2018, Jody filed a motion to set aside the judgment incorporating the MSA on the ground that the pension was an omitted marital asset subject to division, and that Robert committed fraud and breach of fiduciary duty by failing to disclose the existence of the pension. Robert took the deposition of Kenneth Burgi, the attorney who represented Jody in connection with the MSA. Burgi testified (1) he was aware of the existence of Robert's pension plan at Allergan, (2) he believed he had shared that information with Jody, and (3) the MSA awarded that pension to Robert, subject to Jody's equalizing payment.

In a supplemental brief, Jody argued that the case was governed by ERISA and Kennedy v. Plan Administrator for DuPont Savings and Investment Plan (2009) 555 U.S. 285 (Kennedy), and that any waiver of the pension in the MSA was preempted.

IV.THE TRIAL COURT DENIES JODY'S MOTION TO SET ASIDE

In November 2019, Jody's motion to set aside finally came before the trial court for hearing.

The court's minute order reads, in relevant part, as follows:

"[Jody] seeks to set aside the Judgment entered 04/10/12 ("Judgment") based on failure to disclose, presumably pursuant to Family Code section 2122(f). [¶] . . . [¶]

"[Jody] claims that she was never informed of the existence of [Robert]'s Allergan Pension Plan ('Pension') and was only made aware of [Robert]'s Allergan 401(k) Plan. [Robert] argues that the Marital Settlement Agreement ('MSA'), attached to the Judgment, constituted a clear waiver of [Jody's] rights to any pension and no parol evidence is needed on this point, and in any case, that [Jody] and her counsel at the time were made aware of the existence of the Pension at the time the MSA was negotiated.

"As to [Robert]'s first argument, the issue is not whether the waiver was clear but whether the MSA clearly disclosed the existence of the Pension to [Jody].There is no clear statement in the MSA of the existence...