Pulliam v. Pulliam

222 Md.App. 578

114 A.3d 242

Jason PULLIAM

v.Jill Irene PULLIAM.

No. 2426, Sept. Term, 2013.

Court of Special Appeals of Maryland.

April 29, 2015.

Michael B. Green, Towson, MD, for appellant.

Mary Roby Sanders & Dempsey Nash (Turnbull, Nicholson & Sanders, PA, on the brief), Towson, MD, for appellee.

Panel: ZARNOCH, GRAEFF, LEAHY, JJ.

Opinion

LEAHY, J.

Appellant Jason Pulliam is a law enforcement officer employed by the Maryland Transportation Authority Police Force. During divorce proceedings in the Circuit Court for Harford County, Appellant and his then-wife, Appellee Jill Irene Pulliam, agreed, as reflected in the consent judgment entered, that she would receive one half of the marital share of his Law Enforcement Officers' Pension System (“LEOPS”) pension. The parties dispute whether, pursuant to the agreement and consent judgment, a voluntary Deferred Retirement Option Program (“DROP”) benefit is part of Husband's pension plan and properly included in Wife's eligible domestic relations order (“EDRO”). The circuit court concluded that Husband's LEOPS pension plan encompassed the DROP benefits and entered the EDRO.

We hold that the parties' consent judgment was unambiguous and that DROP benefits are part of the LEOPS pension as a matter of law for purposes of the parties' EDRO. We affirm the judgment of the circuit court.

BACKGROUND

Jason and Jill Pulliam were married on June 4, 2005, and one child was born during their marriage. On June 19, 2010, the parties separated, and ultimately filed for divorce in the Circuit Court for Harford County.¹ At the uncontested divorce hearing held on February 7, 2012, the parties, through their counsel, placed the settlement agreement that they had reached on the record. Of particular relevance to this appeal, the agreement addressed Husband's membership in the LEOPS, in which he had been enrolled since November 1, 1997 through his employment at the Maryland Transportation Authority. The parties announced they had agreed that:

Each party will retain [his or her] own 401–K retirement savings.

Mr. Pulliam has a pension through his employer, a law enforcement pension. He will assign a portion of that to Mrs. Pulliam equal to one half, or 60 months, will be the marital share. She is entitled to one half of that portion of service.

Mrs. Pulliam has, at her option and cost, to opt for survivor benefits at the time Mr. Pulliam retires.

Both parties accepted these terms on the record and affirmed their understanding that neither party could “come back and ask for a marital award or for the Court to adjust interest in marital property, or for the Court to take any action regarding property, other than to enforce the terms of this agreement.”

On March 23, 2012, the court entered a judgment of absolute divorce. In its order, the court recognized that the parties had reached an agreement “as to all issues arising out of their marriage”; that this agreement had been read into the record; and that the judgment entered contained its terms. The judgment specifically addressed retirement benefits as follows:

ORDERED, that each party shall retain as their sole and separate property their respective interest in and to their own 401K Plans; and it is further

ORDERED, that the Defendant shall assign to the Plaintiff an interest in the Pension System for Law Enforcement Officers of the State of Maryland, as follows: One half of the Marital Share of his entire pension benefit. The Marital Share is a fraction, the numerator of which is the number of months of the Participant's benefit credited service under the Plan during the parties' marriage, which the parties deem to be 60 months, and the denominator of which is the total number of months of the Participant's benefit credited service under the Plan. Plaintiff shall have the right, at her option, to request survivor benefits equal to her marital share provided she pays the cost of such benefits, and such benefits are available[.]

(Emphasis added).

On August 21, 2013, Wife filed a motion requesting that the circuit court enter an EDRO because Husband had refused to sign the order she had prepared, which specifically addressed the DROP benefits as part of Husband's pension. Accordingly, Husband filed an opposition on September 11, 2013, asserting that the proposed EDRO contained a provision directing that DROP payments were to be included in calculating the marital share, and emphasizing that he was not even eligible to participate in the DROP at the time. On January 17, 2014, the court issued an order and accompanying memorandum opinion granting Wife's motion and entering her proposed EDRO. In its opinion, the court framed the issue as “whether a particular retirement asset known as a DROP was or should be included in the Defendant's retirement assets.” To resolve this issue, the Court relied on Dennis v. Fire & Police Employees' Retirement System, 390 Md. 639, 890 A.2d 737 (2006), which the court found to “completely address[ ]” the issue. The court adopted the Court of Appeals's conclusion in Dennis, id. at 656, 890 A.2d 737, that the DROP payments were to be considered retirement assets within the meaning of the EDRO.² The court noted that in the case under consideration, “the intention of the court in incorporating the agreement of the parties was that all retirement assets be divided pursuant to the formula set by the parties.”

The signed and filed EDRO provided, inter alia, that the “Alternate Payee's [Wife's] share of the Participant's [Husband's] allowance, including any DROP payment not otherwise restricted under the terms of the Participant's plan, shall be an amount that shall be computed by multiplying Participant's Basic Allowance by Fifty Percent (50%) multiplied by the ‘marital share fraction.’ ”³ “The ‘marital share fraction’ is the following fraction: the numerator is 60 months and the denominator is the total number of months of Participant's service credit in the [State Retirement and Pension System of Maryland].” In the event of Husband's untimely death, the EDRO also established (1) that Wife would receive a marital share of any pre-retirement death benefit so long as Husband was not survived by a spouse or minor child and wife, in fact, survives Husband; (2) that if Husband is married at the time of retirement, his surviving spouse would receive any post-retirement survivor benefits, and if Husband was not re-married, he could not elect any optional form of post-retirement survivor benefits; and (3) that if Husband is not survived by a spouse, minor child, or otherwise restricted by his plan, Wife would receive the marital share of Husband's DROP in the event of Husband's death before his participation in the DROP has concluded. Husband filed a timely appeal on February 4, 2014. Additional facts will be discussed below as relevant to our resolution of the issues.

DISCUSSION

Appellant raises one question, which we have rephrased for review:

Did the circuit court err when it ordered that Appellant's future potential DROP benefits should be included as part of his retirement assets to be distributed to Appellee under an EDRO pursuant to the agreement of the parties?

This question, raising issues concerning both the interpretation of the parties' consent judgment and a question of law regarding the DROP, are subject to de novo review by this Court. See Dennis, supra, 390 Md. at 656, 890 A.2d 737 ; Schisler v. State, 394 Md. 519, 535, 907 A.2d 175 (2006) ( “[W]here an order involves an interpretation and application of Maryland constitutional, statutory or case law, our Court must determine whether the trial court's conclusions are ‘legally correct’ under a de novo standard of review.”).

A.Interpretation of the Consent Judgment

Generally, a court granting “a divorce has authority to determine which property is marital property, to assess its value, to order the transfer of ownership of certain categories of property, and to grant a monetary award to adjust ‘the equities and rights of the parties.’ ” Robinette v. Hunsecker, 439 Md. 243, 245–46, 96 A.3d 94 (2014) (citing Maryland Code, Family Law Article (“FL”) §§ 8–201 to –205 and Conteh v. Conteh, 392 Md. 436, 437, 897 A.2d 810 (2006) ). “Among the property rights that may be allocated as part of such a proceeding is a spouse's interest in a retirement plan earned during the course of the marriage.” Id. at 246, 96 A.3d 94 (citing Deering v. Deering, 292 Md. 115, 437 A.2d 883 (1981) ). The court has the statutory authority to transfer ownership of an interest in pension and retirement benefits deemed to be marital property. Md. Code (1984, 2012 Rep. Vol.), FL § 8–205(a)(2)(i).

“[I]n lieu of these judicial determinations, a divorcing couple may enter into an agreement for the allocation of their property, including retirement plan benefits.” Robinette, 439 Md. at 246, 96 A.3d 94 (citing FL § 8–101 ).

In the instant case, the parties proceeded via the latter route by reaching a settlement agreement. At the February 7, 2012, hearing, the parties placed this agreement on the record, providing that “Mr. Pulliam has a pension through his employer, a law enforcement pension. He will assign a portion of that to Mrs. Pulliam equal to one half, or 60 months, will be the marital share. She is entitled to one half of that portion of service.” The Judgment of Absolute Divorce entered on March 23, 2012 incorporated this agreement and provided that Appellee would receive “[o]ne half of the Marital Share of his entire pension benefit.”⁴ The pension benefit was specifically identified as the “Pension System for Law Enforcement Officers of the State of Maryland.” The instant dispute arose because the parties debate the meaning of “pension”; namely, whether the pension includes DROP benefits or whether Appellee was required to specifically negotiate for them.

In Maryland, consent judgments entered into by the parties and endorsed by a court “have attributes of both contracts and judicial decrees.” Dennis, supra, 390...