Dziamko v. Chuhaj

EYLER, DEBORAH S., J. In the Circuit Court for Baltimore County, Hanna Dziamko (“Wife”), the appellant, was divorced from Taras Chuhaj (“Husband”), the appellee. 1 The parties reached a settlement agreement as to all custody, support, and property issues (“the Agreement”). The Agreement was placed on the record in open court and incorporated, but not merged, into the judgment of absolute divorce. This appeal arises from the post-judgment entry of a domestic relations order (“DRO”) and a constituted pension order (“CPO”) necessary to effectuate the Agreement with respect to Wife’s entitlement to a share of Husband’s pensions. 2 Husband has moved to dismiss the appeal. Wife opposes that motion and poses two questions for our review, 3 which we have rephrased as: ¹⁰³ I. Did the circuit court err in entering the DRO and CPO proposed by Husband because the orders failed to properly calculate Wife’s share of the pensions?

II

Did the circuit court err in entering the DRO and CPO proposed by Husband because they did not otherwise comply with the parties’ Agreement? For the reasons to follow, we will deny the motion to dismiss. We answer both questions in the affirmative and, accordingly, shall vacate both orders entered by the circuit court and remand for the entry of new orders consistent with this opinion. FACTS AND PROCEEDINGS The parties married on November 25, 2000.

They had one child, Alina, born on March 10, 2002. After more than seven years of marriage, the parties were divorced on April 14, 2008. Prior to the marriage, in 1988, Husband joined the Maryland (Army) National Guard. He was serving on reserve status when the parties married.

For the first four years of the marriage, Husband worked for the City of Baltimore (the “City”) as a paramedic in the fire department. He was required to contribute 6% of his salary to the Fire & Police Employees’ Retirement System of the City of Baltimore pension system. In November of 2004, he was activated to full time duty in the U.S. Army and has been serving full time since that date. He is on a paid 4 military leave of absence from the City.

Wife attended pharmacy school during the marriage and currently is employed by CVS Pharmacy. ¹⁰⁴ On October 17, 2006, in the Circuit Court for Baltimore County, Husband filed his complaint for absolute divorce, which he later amended. On December 14, 2006, Wife filed a countercomplaint. The case went to a merits hearing on February 25, 2008. After five days of testimony, the parties entered into the Agreement, thereby resolving all outstanding issues.

On March 5, 2008, the terms of the Agreement were placed on the record in open court. As relevant to the instant appeal, the parties agreed as follows: [WIFE’S COUNSEL]: With respect to the husband’s pension retirement benefits from the fire department, wife has an if-as-when interest as to half of the marital share. Same with respect to husband’s military pension, wife has an if-as-[and]-when interest as to half of the marital share. With respect to the military pension, since it is federal in nature, husband agrees to execute whatever authorizations are necessary so that wife can obtain information regarding her interest in that pension and further to authorize the military to make direct payment to wife if she receives any interest in that pension.

After the rest of the Agreement had been placed on the record, the following colloquy occurred: THE COURT: ____I think both parties should understand that these pension rights are frozen in time based on the length of the marriage. So it’s going to be the number of months that you were married— [HUSBAND]: Yes, sir. THE COURT: — that will determine the amount of money she receives. [HUSBAND]: Understood, sir. THE COURT: So as the pension rights increase, that does not necessarily mean her share is going to increase. [HUSBAND’S COUNSEL]: Correct, Your Honor.

THE COURT: I’m going to pull a number out of the air. Let’s say you were in the service for 20 years and you were ¹⁰⁵ married for four years. She’d be entitled to that one half of that pension that was earned during the four-year period. THE COURT: ....

But I want you to understand if you’re in there 20 or 30 years, the amount she receives is frozen in time as of today. [HUSBAND]: Understood, sir. I didn’t know. THE COURT: A lot of people get confused, sir. [HUSBAND]: Understood, sir. The court issued the judgment of absolute divorce on April 11, 2008, and it was entered in the docket on April 14, 2008.

The judgment provided, in pertinent part: 2. That the agreement between the parties, as set forth on the record in open Court, on March 11, 2008,[ 5 ] [hereinafter “Agreement”], entered into by the parties, relative to custody, child support, alimony, property rights, counsel fees, court costs, etc., be and the same is hereby approved and made a part of and incorporated in this Judgment of Absolute Divorce, but not merged herein, having the same force and effect as if fully set forth herein. [See attached Reporter’s Official Transcript Excerpt of Proceedings.] 10. That the parties promptly shall submit to this Court one or more Qualified Domestic Relations Order(s) [hereinafter “QDRO(s)”] or Domestic Relations Orders [hereinafter “DRO(s)”], as defined in the Retirement Equity Act of 1984, as from time to time amended, which Orders shall address the retirement benefits of the parties in accordance with the said Agreement. 11. That this Court retains jurisdiction to amend this Judgment of Absolute Divorce, and/or the aforesaid QDRO(s) or DRO(s) for the purpose of maintaining its/their qualifications as a QDRO(s) or DRO(s) under the Retire ¹⁰⁶ ment Equity Act of 1984, or any other subsequent legislation; and, both parties and the manager/administrator of Plaintiff/Counter-Defendant’s retirement plans shall take whatever actions may be necessary to establish or maintain those qualifications, provided that no such amendment shall require the retirement plan to provide any type or form of benefits, or any option not otherwise provided under the plan(s), and further provided that no such amendment or the right of the Court to so amend will invalidate the order as “Qualified” under the Retirement Act or any related Act.

After entry of the divorce judgment, the parties were unable to reach an agreement as to the terms of the DRO and CPO. On March 16, 2009, Wife filed two motions — one for entry of a DRO with respect to Husband’s City pension and one for entry of a CPO with respect to his military pension. 6 Attached to each motion was her proposed order, Husband’s proposed order, the transcript of the March 5 hearing, and a copy of the divorce judgment. Wife did not request a hearing on her motion. On March 21, 2009, Husband filed an opposition to Wife’s motion with respect to the City pension.

On March 81, 2009, he filed an opposition to Wife’s motion with respect to the military pension. Attached to each was his proposed order. He did not request a hearing either. As we shall discuss, the parties’ proposed orders differed in many respects, most notably in the manner each calculated Wife’s share of the pensions.

On April 9, 2009, the circuit court entered the orders as proposed by Husband. 7 The docket entries state “Granted.” There was no accompanying memorandum opinion. ¹⁰⁷ Wife noted a timely appeal. We shall include additional facts as pertinent to the issues. MOTION TO DISMISS Husband moved to dismiss the appeal, arguing that Wife cannot appeal from a consent order and that she acquiesced in the judgment below by accepting its benefits. Wife responds that she is not appealing from the judgment of absolute divorce, which incorporated the Agreement, but from the terms of the DRO and CPO, entered post-judgment.

We shall deny the motion to dismiss. “The right to appeal may be lost by acquiescence in, or recognition of, the validity of the decision below from which the appeal is taken or by otherwise taking a position which is inconsistent with the right of appeal.” Rocks v. Brosius, 241 Md. 612, 630 , 217 A.2d 531 (1966). In keeping with this principle, ordinarily, “no appeal will lie from a consent decree.” Mercantile Trust Co. v. Schloss, 165 Md. 18, 24 , 166 A. 599 (1933). In the instant case, Wife is not appealing from a consent decree, as Husband contends. Rather, she is appealing from the entry of orders contemplated by the consent decree.

She contends and, as we will discuss, infra, we agree, that the orders entered by the circuit court failed to effectuate the Agreement. When the parties consent to certain terms and those terms are not fulfilled by subsequent court orders, an appeal may be heard. See Smith v. Luber, 165 Md.App. 458, 468-71 , 885 A.2d 894 (2005) (appeal from a consent decree purporting to memorialize the terms of an agreement placed on the record appropriate where the consent decree failed to reflect the parties’ agreement). For the same reason, Husband’s acquiescence argument also fails.

Wife is not seeking to challenge the judgment of absolute divorce, but to enforce its terms. Thus, the fact that she accepted benefits from the judgment, such as a monetary award, does not affect her right to appeal. ¹⁰⁸ DISCUSSION I. Wife contends the parties’ Agreement that she would be entitled to an “if-as-when interest as to half of the marital share” of Husband’s pensions means that her share should be determined using the Bangs formula. 8 She argues that the DRO and CPO proposed by Husband and entered by the circuit court erroneously compute her share of the pensions to her detriment. Husband counters that the Agreement did not contemplate use of the Bangs formula; he references the trial judge’s comments as proof of that fact. He contends that the DRO and CPO entered by the court effectuate the terms of the Agreement and that the orders should be affirmed.

We begin by setting forth the relevant terms of the competing orders. A. DRO The DRO entered by the court, as proposed by Husband, provided, in relevant part, that Wife was “assigned” a portion of Husband’s pension as follows: (a) The amount assigned to the Alternate Payee from the Plan shall be 50% (fifty percent) of the marital property portion of the Member’s contributions accumulated under the Plan as of April 11, 2008 (the date of the parties’ divorce).[ 9 ] The marital property portion is a fraction, the numerator of which is the number of months of credited service acquired during the parties’ marriage, and the denominator of which is the total number of months of the Member’s total credited service in the Plan determined as of April 11, 2008. The parties were married on November 25, 2000, and divorced April 11, 2008. The Alternate Payee shall receive 50% of the aforementioned marital property ¹⁰⁹ portion of the Member’s contributions from any payments made from the Plan to the Member.

The Alternate Payee’s share shall be paid ratably, in accord with the terms and conditions of the Plan, if, as and when payments are made to the Member. In contrast, the DRO proposed by Wife provided the following means of calculating her share of the City pension: i. Alternate Payee’s Share. The Alternate Payee’s Share shall be 50% of the marital property portion of the Member’s total benefit under the Plan.

The marital property portion is a fraction of the Member’s total benefit at the Determination Date, the numerator of which is 88 (which represents the total number of months of the parties’ marriage during which the Member was a participant in the Plan, not including the number of months of DROP participation), and the denominator of the fraction shall be the total number of months of the Member’s participation in the Plan determined at the Member’s Determination Date, not including the number of months of DROP participation. The Alternate Payee shall receive 50% of the aforementioned marital property portion of any payments made from the Plan to the Member if, as and when such payments are made. For purposes of this Agreement the Determination Date is the date of the Member’s retirement. B. CPO Under Husband’s version of the CPO, as adopted by the circuit court, Wife’s share of the military pension would be determined as follows: (a) The amount assigned to the Former Spouse from Member’s benefits shall be 50% (fifty percent) of the marital property portion of the Member’s benefit accumulated under the Plan as of April 11, 2008 (the date of the parties’ divorce).

The marital property portion is a fraction, the numerator of which is the number of the military reserve retirement points accumulated by the Member during the parties’ marriage, and the denominator of which is the total ¹¹⁰ number of months of the Member’s military reserve retirement points determined as of April 11, 2008. The parties were married on November 25, 2000, and divorced April 11, 2008. (b) In the event that Member retires from the military as an active duty member, the numerator of the marital fraction shall be the number of months of credited military service (including reserve service) during the parties’ marriage through April 11, 2008, and the denominator of the fraction shall be the Member’s total number of months of military credited service (including reserve service) through April 11, 2008. (c) The Former Spouse shall receive 50% of the aforementioned marital property portion of any payments of retired pay made from the military pay center to the Member, if, as and when such payments are made to the Member.

Wife’s version calculated her share of the military pension as follows: B. Division of Military Retired Pay. The Former Spouse is awarded a percentage (the “Stated Percentage”) of the Member’s military retired pay (the “Former Spouse’s Share”) to be computed by multiplying 50% times the applicable fraction(s) specified below. (1) For any such military retired pay that is based on the Member’s active duty service, the numerator of the fraction shall be the number of months of marriage during the Member’s creditable military service (which number is 88 months) and the denominator of which is the Member’s total number of months of creditable military service. (2) For any such military retired pay that is based on the Member’s service for the Reserves, the numerator of the fraction shall be the number of reserve retirement points earned by the Member during the parties’ marriage (which number is_points) and the denominator of which is the Member’s total number of reserve retirement points earned. ¹¹¹ C. Bangs Formula In Deering v. Deering, 292 Md. 115 , 437 A.2d 883 (1981), the Court of Appeals first enunciated the rule that a pension is marital property to the extent that it accrues during the marriage.

It recognized, however, the difficulties in valuing this particular marital asset: “[t]he problem of valuing prospective benefits under a pension plan is frequently exacerbated by the fact that unmatured rights may be terminated by death, discharge, or other contingencies. Valuation is further complicated by the dual nature of most pension plans. If the employee continues to work until retirement, the payments to the employee, to the extent derived from employer’s contributions, are in the nature of deferred compensation. If, however, the employee terminates work before retirement age, the usual plan provides at least for the return of employee contributions.” [ (citations omitted).] Id. at 129 , 437 A.2d 883 (quoting Bloomer v. Bloomer, 84 Wis.2d 124 , 267 N.W.2d 235, 238 (1978)) (alterations in Deering ).

The Court suggested three possible methods of valuing pension benefits at the time of divorce. First, a trial court could calculate the value of the member’s contributions to the pension during the marriage, plus interest. Second, the court could attempt to compute the present value of the pension when it vests. 10 Third, the court could “ ‘determine a fixed percentage for [the non-memberj of any future payments [the member] receives under the plan, payable to [the non-member] as, if, and when paid to [the member].”’ Id. (quoting Bloomer, supra, 267 N.W.2d at 241 ).

In Bangs, supra, this Court approved the application of the third method to calculate the marital portion of a pension ¹¹² earned both during and outside of a marriage. 11 59 Md.App. 350 , 475 A.2d 1214 . Under that formula, the marital portion (sometimes called the marital share) is “a fraction of which the number of years and months of the marriage [] is the numerator and the total number of years and months of employment credited toward retirement is the denominator[.]” Id. at 356 , 475 A.2d 1214 . The non-member spouse’s share of the martial portion of the pension is determined by applying an agreed-upon fixed percentage to it. That fixed percentage then is applied to any future payments received under the pension plan.

For example, if the parties were married 100 months during which the pension were accruing, and the pension accrued for a total of 1,000 months (from member’s employment to retirement), the marital portion of the pension would be ydo, or 10%. If the pension payments were to be divided equally (by court decision or agreement), the nonmember’s share of each payment, if paid to the member, as paid to the member, and when paid to the member, would be X % or 5%. 12 This “if, as, and when” method of calculating the marital portion of a pension has since been codified as the default method in Maryland. See Md.Code (2006 Repl. Vol., 2009 Supp.) § 8-204(b) of the Family Law Article (“FL”). 13 Judge Moylan, writing for this Court in Heger v. Heger, 184 Md.App. 83, 107 , 964 A.2d 258 (2009), revisited Bangs, noting that “[i]n determining the marital contribution and the non- ¹¹³ marital contribution toward the growth of a pension, the use of the so-called Bangs formula calls for cautious application.” He emphasized that Bangs was concerned merely with calculating the marital portion of a pension and that the formula applicable to the facts of that case would not necessarily capture the appropriate share in every case. 14 Rather, this Court should focus on the underlying principle, implicit in Bangs, that the marital portion is the percentage of the pension accrued during the marriage.

That is, the numerator must reflect “Years and months of marriage IN WHICH THE PENSION CONTINUES TO ACCRUE AND GROW.” Id. at 108 , 964 A.2d 258 (emphasis in Heger). D. Analysis With this background in mind, we turn to the Agreement and the orders attempting to effectuate its terms. The parties agreed that Wife was entitled to an “if-as-when interest as to half of the marital share” of both pensions, i.e., that the marital portion of each pension would be paid one-half to Wife if, as, and when the pension payments were paid to Husband. As is clear from our discussion above, “if, as and when” has a specific meaning in Maryland with respect to division of pensions.

Wife is correct that this phrase necessarily connotes application of the Bangs formula, as clarified in Heger , among other cases. Although Husband seems to contend in his brief that the trial judge’s comments on March 5, 2008, concerning the Agreement somehow altered its terms, at oral argument his counsel candidly agreed that the judge’s words could not change the parties’ agreement. In our view, the judge, in stating that “these pension rights are frozen in time based on the length of the marriage,” merely was explaining that the numerator in the Bangs equation was “frozen.” This is a correct statement of the law. In any event, the terms of the ¹¹⁴ Agreement are those set forth by the parties, as read into the record by Wife’s counsel.

See Long v. State, 371 Md. 72, 83-84 , 807 A.2d 1 (2002) (“It is the parties’ agreement that defines the scope of the [consent] decree.”) Husband’s counsel was given an opportunity to add to or dispute any of its terms. He did not do so. The terms of the DRO and the CPO, as adopted by the