Steblein v Bernard

[*1] Steblein v Bernard 2005 NY Slip Op 50290(U) Decided on February 24, 2005 Supreme Court, Niagara County Doyle, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 24, 2005
Supreme Court, Niagara County

Joel A. Steblein, Plaintiff

against

Susan L. Bernard f/k/a SUSAN L. STEBLEIN, Defendant



114167



ALLEN D. MISKELL, ESQ.

Attorney for Plaintiff

CHARLES P. BEN, ESQ.

Attorney for Defendant

Vincent E. Doyle, J.

In this post-divorce action, Defendant has moved for an order holding Plaintiff in contempt for failure to abide by the parties' Judgment of Divorce, as well as a variety of other relief. Plaintiff has opposed the motion and cross-moved for other relief.

Now, upon reading Defendant's Notice of Motion, dated October 19, 2004 together with the supporting papers submitted therewith; Plaintiff's Cross-Notice of Motion, dated November 10, 2004 together with the supporting papers submitted therewith; Defendant's responsive Affidavit dated November 18, 2004; upon all other pleadings and proceedings in this action; and with due deliberation thereon, this Court finds as follows:

Pension Benefits

The parties' Judgment of Divorce, granted March 19, 2003, incorporated, but did not merge, a Property Settlement and Separation Agreement which the parties entered on December 16, 2002 ["Agreement"]. Pursuant to the Agreement, Defendant was to receive 34.67% of Plaintiff's gross military pension benefits less the cost of survivor benefits. Plaintiff paid these benefits for a period of time, but subsequently opted to receive military disability benefits, which [*2]pursuant to Federal Law, necessarily involves a dollar-for-dollar waiver of military pension benefits. See, 38 USC §5305. Plaintiff's election therefore, resulted in a substantial reduction in the amount of retirement income available to Defendant, and an increased benefit to himself since he now collects the entire benefit amount. Additionally, unlike military retirement pay, military disability benefits are exempt from taxation. 38 USC §5301(a). Thus, this additional sum also inures to Plaintiff 's benefit.

Defendant has not only an equitable distribution interest in Plaintiff's military pension, but also an interest based on her right to maintenance. The Agreement explicitly sets forth that Defendant was waiving her right to maintenance based upon her right under the Agreement to receive her share of Plaintiff's military pension. The parties further stated in the Agreement that but for Defendant's anticipated receipt of her share of the military pension, she would have been entitled to maintenance. In fact, until the entry of a QDRO or the expiration of 12 months, Plaintiff was to pay maintenance to Defendant in the amount of $397 per month, which was equivalent to the value of her 34.67% interest in the military pension at the time of divorce. See Agreement, page 7. Therefore, it is clear that Defendant is entitled to these payments, regardless of their definition as maintenance or equitable distribution, and whether paid through Plaintiff's retirement benefits or otherwise.

While nondisability retirement benefits may be distributed to a non-title holding spouse in a divorce action, state courts are prohibited from so distributing veterans' disability benefits. See, 10 USC §1408; Newman v Newman, 248 AD2d 990; Mansell v Mansell, 490 U.S. 581. However, although state courts may not award support based on military disability benefits, they can enforce agreements relating to this issue. Hoskins v Skojec, 265 AD2d 706.

Because the parties' Agreement was not merged into the Divorce Judgment, it remains a separate and enforceable contract between them. Merl v Merl, 67 NY2d 359. By accepting its benefits and performing obligations under the Agreement, Plaintiff is deemed to have ratified its terms. Buetel v Buetel, 55 NY2d 957; Hoskins v Skojec, supra.

Here, the parties contracted for Plaintiff to make certain payments to Defendant. Initially, this payment was to be made directly between the parties. After a QDRO was entered, the payment was to be made from Plaintiff's pension. Regardless of the source of the payment however, it remains a contractual obligation Plaintiff is bound to fulfill, as well as a benefit Defendant is entitled to receive. By unilaterally waiving his pension benefits, thus depriving Defendant of the expected fruits of the contract, Plaintiff breached the Agreement. Johnson v Johnson, 37 S.W.3d 892; Krapf v Krapf, 55 Mass. App. Ct. 485; Mihnovets v Mihnovets, 1993 WL 381452.

Plaintiff has been and continues to be under a continuing obligation to make payments to Defendant in an amount equal to 34.67% of what would have been Plaintiff's full non-disability pension benefit had he not compromised that amount by executing the waiver.

[*3]Arrears

Pursuant to the Agreement, it was incumbent upon Defendant to file a QDRO within 12 months of the effective date of the Agreement in order to maintain a continuous stream of benefits. Because she did not do so within the requisite time frame, Plaintiff claims she forfeited her right to the benefit until such time as she does in fact effectuate a QDRO. However, because of Plaintiff's unilateral reduction of the pension, Defendant was unable to file a QDRO for her full interest and should not be penalized as a result.

This Court was not presented with specific information with which to calculate the amount of arrears. However, it is determined herein that the calculation should commence as of the first month of non-payment, irrespective of Defendant's failure to file a QDRO, for reasons explained above, and should be in an amount equal to 34.67% of what Plaintiff would have received as a non-disability pension benefit had he not executed the waiver.

Attorney Fees

But for Plaintiff's improper and willful denial of Defendant's entitlements under the Agreement, this application would not have been made necessary, and Defendant would not have had to suffer in the interim without her rightful stream of income. Therefore, Plaintiff is to pay to Defendant's attorney, Charles P. Ben, Esq., the amount of $2,000 as and for attorney fees incurred in connection with the instant application.

Plaintiff's request for counsel fees is denied.

Medical Contributions, Child Support, Marital Home Refinance/Release

Plaintiff has made application to this Court for a determination and order with respect to the following: 1) arrears alleged to be owed by Defendant for her pro-rata contributions toward the children's medical insurance; 2) that Plaintiff be permitted to reduce his child support payments by the amount of such arrears; 3) for a recalculation of Plaintiff's child support obligations based upon his current income; 4) for Defendant to execute a release of liability or a refinance of the former marital residence. However, insufficient information was presented to this Court with respect to these issues. A pre-trial has therefore been scheduled on Friday, March 18, 2005, at 10:30 A.M. at which time these matters will be addressed.

This constitutes the Order and Judgment of this Court and shall be filed as such.

DATED:Niagara Falls, New York

February 24, 2005

__________________________

HON. VINCENT E. DOYLE

Justice of the Supreme Court