Schatz v. Feliciano-Schatz

170 A.D.3d 766

94 N.Y.S.3d 350

Susan A. SCHATZ, etc., et al., Appellants,

v.Carmen B. FELICIANO–SCHATZ, etc., Respondent.

2016–11577

Index No. 001687/15

Supreme Court, Appellate Division, Second Department, New York.

Submitted—September 27, 2018

March 6, 2019

Catania, Mahon, Milligram & Rider, PLLC, Newburgh, N.Y. (Richard M. Mahon II of counsel), for appellants.

Mark D. Stern, Goshen, NY, for respondent.

ALAN D. SCHEINKMAN, P.J., MARK C. DILLON, JEFFREY A. COHEN, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

ORDERED that the order is modified, on the law and on the facts, (1) by deleting the provision thereof denying that branch of the plaintiffs' motion which was for summary judgment on the cause of action to recover damages for breach of contract insofar as asserted by the plaintiff Paul Schatz, as administrator of estate of Aloysius Schatz, and substituting therefor a provision granting that branch of the plaintiffs' motion, (2) by deleting the provision thereof granting the defendant's cross motion for summary judgment dismissing the complaint, and substituting therefor a provision denying the defendant's cross motion; as so modified, the order is affirmed, with costs to the plaintiffs.

In April 1998, the plaintiff Susan A. Schatz (hereinafter Susan) and Aloysius Schatz (hereinafter the decedent) were divorced. In February 2004, the decedent married the defendant. In December 2006, the decedent retired from his employment and began receiving benefits from his New York Stock Exchange Retirement Plan. The decedent elected a joint and survivor annuity with the defendant named as joint annuitant. In November 2011, the decedent and the defendant were divorced. On June 4, 2012, the defendant and the decedent entered into an amendment to a stipulation of settlement dated July 20, 2011, and judgment of divorce dated November 22, 2011 (hereinafter the amendment), pursuant to which each of them waived their rights to each other's retirement plans. The amendment also indicated that in the event that either of the parties received payments in contravention of the agreement, the benefits would be turned over to either a beneficiary designated by the other party or to the other party's estate. Subsequent to executing the amendment, the defendant remained the only named beneficiary on the decedent's retirement plan. On May 21, 2013, Susan remarried the decedent, and on May 30, 2013, the decedent died. Upon the decedent's death, benefits were paid out to the defendant as the named beneficiary under the decedent's retirement plan. Susan and the administrator of the decedent's estate (hereinafter together the plaintiffs) commenced this action, inter alia, to recover damages for breach of contract and unjust enrichment, alleging, inter alia, that the plaintiffs were entitled to the decedent's retirement benefits, as the defendant had waived her rights to the subject benefits pursuant to the amendment. The plaintiffs moved, inter alia, in effect, for summary judgment on the complaint, and the defendant cross-moved for summary judgment dismissing the complaint. In an order dated September 28, 2016, the Supreme Court denied the plaintiffs' motion and granted the defendant's motion. The plaintiffs appeal from the order.

"Although ERISA prohibits assignment or alienation of benefits while they are held by the plan administrator, ... once they are paid to the beneficiary, the funds are no longer entitled to that protection" ( Matter of Christie, 152 A.D.3d at 767, 59 N.Y.S.3d 421 ; see DaimlerChrysler Corp. v. Cox, 447 F.3d 967, 974 [6th Cir). " ‘[J] ust as ERISA's anti-alienation provisions do not preempt a valid QDRO from effecting a beneficiary designation, those provisions do not prevent a valid waiver of beneficiary interests’ " ( Matter of Christie, 152 A.D.3d 765, 767, 59 N.Y.S.3d 421, quoting Silber v. Silber, 99 N.Y.2d 395, 402, 757 N.Y.S.2d 227, 786 N.E.2d 1263 ). However, the purported waiver of benefits under a pension plan must be " ‘explicit, voluntary and made in good faith’ " ( Matter of Christie, 152 A.D.3d at 767, 59 N.Y.S.3d 421, quoting Silber v. Silber, 99 N.Y.2d at 404, 757 N.Y.S.2d 227, 786 N.E.2d 1263 ).

We agree with the plaintiffs' contention that, pursuant to the amendment to the settlement agreement, the defendant validly waived her entitlement to the subject retirement benefits. The amendment stated that the decedent and the defendant waived any and all claims that "he or she may have or may hereafter acquire or possess to share in any pension, profit-sharing, IRA, 401(k) plan or any other retirement or deferred compensation plan established for the other party." Contrary to the Supreme Court's determination, the waiver language in the amendment was sufficiently explicit to effectuate a valid waiver of benefits under the subject plan (see Hess v....