We recently received a favorable appellate decision on behalf of our client whose ex-husband tried to manipulate their divorce agreement regarding distribution of his New Jersey PERS pension (“pension”) nearly three decades after the agreement was signed.  We did not represent her at the time of the divorce, but did represent her to defend against this frivolous post-judgment litigation.

The unpublished decision of Tapanes v. Perez is an important reminder to have your Qualified Domestic Relations Orders (“QDRO” – the Order that enables spouses to distribute retirement plans without tax or penalty) prepared and finalized simultaneously with the divorce decree.  QDROs are often the last task performed because you must have a signed agreement or Judgment containing the terms of distribution before the QDRO can be prepared and then implemented.  In this case, letting the QDRO enabled the former husband to collect the former wife’s share of the pension for nearly eight years between his retirement in 2010 and her receipt of benefits in 2018 because the QDRO was not entered and he did not alert the State of her rights when he retired.  Had the QDRO been entered, even decades earlier, it would have been on record.  Even worse, after depriving his former wife of the benefit of her bargain for years, he brought litigation seeking to rewrite the agreement in order to avoid paying the arrears the accrued during that period.  Time finally caught up to him…

The simple facts are as follows.  The parties entered into a divorce agreement in 1993 that provided for equitable distribution of the marital portion of the pension.  The agreement noted that a lump sum payment would be made in limited circumstances, such as his death and/or separation from the plan, which did not occur.  The agreement also noted a pension valuation that the parties never obtained.  The parties did not procure a Qualified Domestic Relations Order (“QDRO”) to distribute the marital portion of the pension following their divorce.

The former husband retired in 2010 and began collecting his benefits.  He did not alert the State of New Jersey that his former wife was entitled to a share of his benefits.  By the time the wife began collecting her share of the benefits in 2017, over $70,000 of arrears had accrued.

In the fall of 2017, the former wife contacted her former husband (he now resides in Florida) to have the appropriate QDRO prepared.  He ignored her.  She hired All Pro QDRO to prepare the draft QDRO and it was sent to both parties for review.  He ignored it.  After her attempts to resolve the issue without the need for litigation, the former wife filed a motion in the trial court seeking to have the QDRO implemented.  He ignored the motion.  Notwithstanding, the trial court gave him more time to sign the QDRO in the initial Order entered in November 2017.  Surprise, he ignored it.  Thus, the trial court entered the QDRO without his signature.

After the Orders were entered, the former husband had two New Jersey attorneys write to the former wife indicating his consent to the form of QDRO but seeking (a) valuation for a lump sum payment that was not applicable and (b) to offset the arrears that accrued because he had wrongfully collected her share of the benefits.

In early 2018, when the former wife finally began receiving her share of the pension, he filed a motion in the trial court to have the QDRO vacated, putting forth arguments that failed for procedural, factual and legal reasons.  Notably, he never appealed or even sought reconsideration of the November Orders even though he was properly served with the underlying motion and the Orders themselves, as well as had two attorneys contact his former wife about the QDRO after it was entered.  Additionally, the language of the parties’ divorce agreement did not permit a lump sum payment except under limited circumstances that did not occur here.  Moreover, while the former husband claimed Anti-Marx language should be read into the agreement, but it simply didn’t exist and Marx (or the coverture fraction) is the appropriate way to distribute the pension.   Even though he filed a Motion under Rule 4:50-1 (that permits vacating  judgments in certain circumstances), the former husband did not meet the standard to have the Orders vacated. Put another way, he did not advance a legal or factual position to have the QDRO vacated. The former husband’s trial court motion was denied in April 2018.

Refusing to just stop there, the former husband then filed an appeal.  In its decision, the Appellate Division stated:

The QDRO fulfilled the terms of the parties’ settlement agreement, whose plain language required an equitable distribution of the value of the marital portion of the pension. The Marx marital coverture formula effectuates a division of the value of a pension. Panetta v. Panetta, 370 N.J. Super. 486, 494- 95 (App. Div. 2004). The settlement agreement did not eschew a Marx formula.

Moreover, other than a self-serving certification authored by his former divorce attorney, defendant provided the motion judge no objective evidence, valuation, or rationale to support his argument why plaintiff should only receive $3,903.21 as her share of equitable distribution from the asset. The settlement agreement’s mention of a lump sum distribution pertained only to defendant in the event he died or separated from the plan. Therefore, notwithstanding defendant’s failure to object to the entry of the QDRO, the record does not support his tortured interpretation of the settlement agreement regarding the pension division.

Our client spent over a year in litigation on this issue that her husband created.  During that time, she was fearful of spending the pension benefits that her former spouse wrongfully deprived her of for approximately eight years.   After defeating her former spouse in the trial court and Appellate Division, she is finally getting the retirement benefits she bargained for over 25 years ago!


Lindsay A. Heller is an associate in the firm’s Family Law practice, based in its Morristown, NJ office. You can reach Lindsay at 973.548.3318 or lheller@foxrothschild.com.

Lindsay A. Heller, Associate, Fox Rothschild LLP

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