RICHARDSON v. RICHARDSON
774 A. 2d 1267 (Pa. Super. 2001)

ISSUE:

Whether the trial court could award the non-marital portion of Husband’s pension to Wife as a contempt sanction, including amounts due for alimony arrears and medical bills.

HOLDING:

(1) The Court could attach Husband’s entire pension and award it to Wife, after finding that Husband was in willful contempt of its previous orders, where the non-marital portion of the pension was not awarded during initial distribution of the parties’ assets.

(2) The Court could hold Husband in contempt for failure to sign a Qualified Domestic Relations Order, since that was the only mechanism the court could use to ensure that Wife received the arrearages owed to her by Husband.

(3) Husband was liable for Wife’s medical bills during the time when he allowed her medical insurance to lapse.

(4) Husband was responsible for alimony arrears owed to Wife.

(5) The lower court correctly calculated the alimony and equitable distribution indebtedness from the date of the hearing to the date when the pension would come into pay status.

FACTS AND PROCEDURAL HISTORY:

Kenneth and Ann Richardson were married in 1975 and had one child, a daughter, in 1978. Following a bifurcated divorce in February 1996, Husband remarried; Wife and the minor child relocated to Tennessee.

The Chester County court, per Platt, J., entered an equitable distribution order in May 1997, following a four-day trial. As part of the award, Wife was to receive 60% of Husband’s DuPont pension, 60% of his DuPont Savings and Investment Plan (“SIP”), 60% of the house sale proceeds, alimony at $2,750 per month for an indefinite period, and COBRA health insurance coverage for three years from the date of the divorce. Husband was also to provide Wife private health insurance at Husband’s expense when the COBRA coverage expired, so that Wife would have a full 36 months of medical insurance following the equitable distribution award and would not be prejudiced by the grant of the bifurcated divorce.

Husband paid the alimony and medical insurance premiums through the end of 1997. He refused to sign the Qualified Domestic Relations Order for the pension or the SIP during this period. He then left DuPont, liquidated the entire SIP account and moved to Switzerland with his new wife. He stopped paying alimony and let the COBRA coverage lapse.

Wife sought enforcement of the equitable distribution order twice in 1997 and again in1998 and 1999. In August 1999, Judge Jacqueline Carroll Cody found Husband in contempt and imposed sanctions. Husband again refused to comply and the matter was heard by Judge Katherine B. L. Platt in May 2000.

Judge Platt awarded Wife part of the non-marital portion of Husband’s pension as a sanction for his continued contempt of the court’s equitable distribution order.

Concluding that the pension was the only asset left intact, Judge Platt’s contempt sanction against Husband was to award Wife 100% of the marital portion of the pension, plus additional funds from the non-marital portion. The total award to Wife was $243,467.43, including interest on the unpaid obligations from the date of the hearing to the date the pension would go into pay status.

In calculating this award, Judge Platt took the amounts due to Wife as of the date of the hearing in May 2000 for alimony arrears, the SIP account, medical expenses incurred by Wife due to the lapse of the COBRA coverage, and counsel fees awarded by Judge Cody in 1999, and added legal interest until 2014, the year the pension would go into pay status.

Husband appealed this Order to the Superior Court, which affirmed.

ANALYSIS:

Husband challenged the trial court’s order on five grounds: that the court improperly awarded Wife non-marital assets which should have been preserved for Husband’s new family; that he could not be held in contempt for refusing to sign a Qualified Domestic Relations Order, that he should not have been required to pay Wife’s medical bills during the time he allowed the COBRA coverage to lapse, that he should not have been assessed arrears on the alimony obligation because he claimed he lost his job in 1997, and that the lower court improperly calculated the future value of the pension indebtedness. The Superior Court found that none of these arguments had merit.

Regarding the pension award, the Superior Court first noted that the trial court has broad powers under the Divorce Code when fashioning a contempt order, including those powers under Section 3502(e). The Court then noted that Husband’s argument ignored the fact that this was not an order of equitable distribution, when the award of non-marital assets would be improper; rather it was an award based on Husband’s willful contempt of not only the equitable distribution order but every subsequent order which attempted to enforce that order. The award was “designed to compensate” Wife for the losses she incurred as a result of Husband’s failure to comply.

Husband’s second argument, that he should not be held in contempt for failure to agree to a stipulation ( signing the QDROs) was also found to lack merit. The Superior Court accepted the rationale of the lower court that the only asset remaining to satisfy Husband’s financial obligations to Wife was the pension. Distribution of the pension benefits would not ordinarily accrue until Husband’s retirement age. The signing of the Qualified Domestic Relations Order was a necessary mechanism to insure that Wife would receive the arrearages due to her.

Husband’s third argument was that he should not be assessed for the medical bills incurred by Wife , but only for the cost of medical insurance for her. The Court rejected this argument. Husband’s obligation was to pay for medical insurance to prevent Wife from incurring uninsured medical expenses. When he stopped making payments for the COBRA coverage and allowed the coverage to lapse, Wife incurred substantial medical expenses. The Court reasoned that Husband’s failure to fulfill his legal obligations were the cause of Wife’s indebtedness for medical bills and these amounts were properly included in the calculation of what he owed.

Husband’s fourth argument was that he should not be held in contempt for failure to pay alimony because he “lost” the job on which alimony was based in 1997. He also argued that the lower court had not acted on his petition to terminate or modify the alimony, filed March 6, 2000. The Court noted that Husband had never appeared in court to testify about his termination of employment at DuPont. At the time he filed the petition to modify, the amounts for alimony and medical insurance were more than two years overdue.

Husband’s final argument was that the court improperly calculated the future value of the pension indebtedness. The lower court imputed an amount owed in 2014, appellant’s earliest retirement year, by stating the amounts owed for alimony, the SIP award, medical expenses and counsel fees due as of the date of hearing in May 2000. To that amount, the lower court added legal interest to November 2014, the earliest date that Husband could begin to receive retirement benefits. This amount did not include any future award of alimony. After reviewing the calculations in an exhibit submitted at trial, the Superior Court concluded that the lower court acted correctly, and upheld the lower court’s methodology and its result.

The order of the Chester County court was affirmed.

CASE NOTE AUTHOR’S COMMENTS:

Family law practitioners often face the problem of enforcing an equitable distribution order against a party who refuses to comply. The result may look great on paper but seem impossible to enforce. The spouse seeking compliance wonders why the court system seems powerless to protect her and why she must spend even more money on legal fees to obtain the assets which the courts awarded her.

The Superior Court has now sent a clear message to non-compliant spouses and counsel who represent them in Richardson v. Richardson. The courts may attach the non-marital portion of the pension as a contempt sanction for non-compliance of an order of equitable distribution, alimony and medical insurance.

Patricia T. Brennan

Chester County

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1. Funds from Husband’s share of the house proceeds were placed in escrow and used to pay the alimony for the last four months of 1997.

2. The trial court, per Judge Melody, denied Wife’s petition to freeze the DuPont SIP account pending finalization of the QDRO.

3. Husband never appeared in the Chester County courts after the April 1997 equitable distribution hearings, but he was represented by counsel at each subsequent hearing.

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Patricia T. Brennan, Esq. is a sole practitioner in West Chester, where she practices family law and provides private mediation in family law matters.