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HomeMy WebLinkAbout1997-3059 Civil THOMAS A. DEMPSEY, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : v. : NO. 97-3059 CIVIL TERM : NOREEN P. DEMPSEY, : CIVIL ACTION - LAW Defendant : ORDER OF COURT th AND NOW , this 27 day of November, 2007, after hearing on the Petition to Terminate Alimony, IT IS HEREBY ORDERED AND DIRECTEDDENIED that the Petition is . By the Court, _________________________ M. L. Ebert, Jr. J. Wayne F. Shade, Esquire 53 West Pomfret Street Carlisle, PA 17013 Attorney for Plaintiff Hubert X. Gilroy, Esquire Jennifer L. Spears, Esquire Martson Deardorff Williams Otto Gilroy & Faller 10 East High Street Carlisle, PA 17013 Attorneys for Defendant THOMAS A. DEMPSEY, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : v. : NO. 97-3059 CIVIL TERM : NOREEN P. DEMPSEY, : CIVIL ACTION - LAW Defendant : IN RE: PETITION TO TERMINATE ALIMONY OPINION AND ORDER OF COURT Ebert, J., November 27, 2007 – In this alimony case the Defendant wife was awarded alimony and a percentage of Plaintiff husband’s military pension pursuant to a marital settlement agreement, Plaintiff husband has petitioned for a termination of the alimony based upon his claim that wife’s receipt of her portion of his military pension constitutes substantially changed circumstances. Having considered the testimony and evidence presented by both parties, this court has denied this petition. STATEMENT OF FACTS Plaintiff is Thomas A. Dempsey (hereinafter “Husband” or “Plaintiff”), 54, a domiciliary of Cumberland County, residing at 28 Eastbrook Lane, Carlisle, Pennsylvania. Defendant is Noreen P. Dempsey (hereinafter “Wife” or “Defendant”), 59. The parties were divorced by a decree dated December 19, 2000. The divorce decree incorporated a marital settlement agreement (“Agreement”) between the parties on December 12, 2000, and both parties were represented by counsel at the time of agreement. The Agreement included the following alimony provision: 9. The existing spousal support award in the amount of $779.09 shall be converted to alimony payable through the Domestic Relations Office. Alimony is modifiable in the event of a substantial change in circumstances. Alimony is terminable in the event of the death, remarriage, or cohabitation of wife with an adult male who is not related to her within the degrees of consan[g]uinity. On June 26, 2006, Plaintiff wrote a letter to Defendant, asking her to agree in writing that her receipt of funds from Plaintiff’s pension was such a substantial change in circumstances under the Agreement that it would operate to terminate the agreed alimony. Defendant would not agree to a termination of alimony, so on July 6, 2006, Plaintiff filed a Petition for Termination or Reduction of Alimony, based upon his claim of substantially changed circumstances. The primary changed circumstance alleged was Defendant’s actual monthly receipt of funds from Plaintiff’s pension, which was to enter into pay status after Plaintiff’s retirement on July 31, 2006. In addition, Plaintiff’s petition averred that, since the initiation of alimony, Defendant’s income had increased. A hearing on the petition was held on September 7, 2007. The credible evidence at the hearing may be summarized as follows: Plaintiff and Defendant were married on July 5, 1980. Three children were born of the marriage; Patrick Dempsey is currently 25 years old and is living independently, while 20 year- old Siobhan Dempsey and 15 year-old Michael Dempsey both reside with Defendant. Plaintiff and Defendant separated in September 1997. Plaintiff instituted a divorce action, and, as previously indicated, a decree in divorce was issued on December 19, 2000. On December 12, 2000, the parties entered into a marital settlement agreement to settle the economic issues and distribute the marital assets. An alimony order was awarded to Defendant. Under the Agreement, the primary marital asset distributed was the Plaintiff’s military pension. At the time of the Agreement, Plaintiff had more than twenty-five years of active duty service in the Army. Though he was eligible for retirement at the time, he intended on serving at 2 least thirty years in the Army. Plaintiff was required to make monthly alimony payments of $779.09 to Defendant for an indefinite period under the Agreement. When the Agreement was entered into between the parties, Plaintiff was aware that the amount she would receive in the future when the pension entered pay status would be substantially more than the agreed upon monthly alimony payments. The Agreement had three provisions relevant to calculating Defendant’s share of the Plaintiff’s pension: 3. The numerator of the coverture fraction with respect to husband’s pension will be 17.17. 4. If wife elects the survivor benefit in connection with husband’s pension, the cost of the survivor benefit will be deducted from the monthly benefit prior to the division of the pension. 5. Wife is awarded 60% of the coverture portion of husband’s pension as reduced by the cost of any survivor benefit. Plaintiff’s total military service through July 31, 2006 was thirty-one years and two months, so the denominator for the coverture fraction was 31.17. At the time of his retirement, Plaintiff’s monthly retirement benefit was $6,649, which was reduced by $433.83 per month because Defendant elected the survivor benefit in connection with Plaintiff’s pension. The coverture portion of his retirement benefit, which was calculated by multiplying the net retirement benefit of $6,215.17 by the coverture fraction, 17.17/31.17, equals $3,423.62 per month. This amount was multiplied by 60% to determine Defendant’s share of the coverture portion, which was $2,054.17 per month at the time of Plaintiff’s retirement. Since Plaintiff’s retirement, Plaintiff’s monthly retirement benefit has increased to $6,868. After reduction of $447.52 per month for Defendant’s survivor benefit election, Defendant’s monthly share of the coverture fraction is $2,122.37. 3 At the time of the Agreement, Defendant was employed as a school teacher. Her gross earned income in 2000 was approximately $22,000. By 2006, Defendant’s gross earned income had increased to approximately $28,000. Plaintiff was still a Colonel in the military at the time of the Agreement, and was earning approximately $90,000 per year. His annual salary had increased to approximately $120,000 at the time of his retirement from the military. In 2006, Plaintiff’s gross income from his military work and post-retirement subcontracting work was $186,000. He is currently employed as a consultant, and at the time of the hearing had earned approximately $81,000 in 2007. During negotiations for the Agreement and when it was finalized, the sole marital asset in discussion was Plaintiff’s military pension. At that time, both parties recognized that the pension would not enter pay status until Plaintiff’s retirement. Both parties were aware of the monthly alimony payments and the coverture numerator and Defendant’s percentage share to be used in calculating the Defendant’s allocation of Plaintiff’s pension. Furthermore, Plaintiff agreed to pay alimony of $779.09 per month to Defendant even though he knew that Defendant would get 60% of the coverture portion of Plaintiff’s military pension at some future date. DISCUSSION Plaintiff has petitioned this court to terminate his alimony payments to Defendant, based on a theory of substantial change in circumstances. On a petition to terminate alimony, the burden of proof rests upon the petitioner to demonstrate that a change is warranted. See Anderson v. Anderson, 822 A.2d 824 (Pa. Super. Ct. 2003). Thus, in the present case, the relief requested by Plaintiff was dependent upon his proof that a substantial change of financial circumstances as contemplated by the parties’ agreement had occurred, either to Plaintiff’s prejudice or Defendant’s advantage, or both. 4 Under the terms of the Agreement, the sole marital asset to be divided and awarded as equitable distribution was Plaintiff’s military pension. The parties contemplated and took the future distribution of the pension into account when drafting the 2000 Agreement. Both parties recognized and understood that Defendant would receive a portion of Plaintiff’s pension upon his retirement. Furthermore, both parties recognized that Defendant’s share of the coverture portion of Plaintiff’s pension would be greater than the monthly pension amount that was payable to Defendant under the Agreement. With this knowledge, Plaintiff agreed to pay indefinite alimony of $779.09 per month to Defendant. Plaintiff testified on the record that he had discussed a substantial change in circumstances with his attorney prior to negotiations. However, this concern was not discussed during actual negotiations, and there is no specific language in the Agreement that contemplates that either party considered Plaintiff’s pension entering pay status to be a substantial change of financial circumstances. Under the Agreement, Plaintiff agreed to give Defendant monthly alimony payments with the understanding that in addition, Defendant would receive a portion of Plaintiff’s military pension upon his retirement. Therefore, Defendant’s receipt of a percentage of the pension, once it entered pay status, does not constitute a substantial change of financial circumstances. Plaintiff argues that Defendant’s receipt of a portion of his pension is an increase of her income, which results in a substantial change of financial circumstances, thus his alimony payments should be terminated. Defendant has cited a 2001 Superior Court case which held that money received from the sale of an asset awarded in an equitable distribution is not includable as income for calculating support payments. Miller v. Miller, 783 A.2d 832, 835 (Pa. Super. 2001). Although Miller involves the proceeds from the sale of an asset which had been awarded in an equitable distribution, this Court still finds that case’s reasoning applicable to the present case. 5 The court in Miller distinguished assets awarded in an equitable distribution, stating that it would be illogical and inequitable to characterize these assets as income. Likewise, Defendant’s receipt of Plaintiff’s pension benefits should not be calculated as income for support purposes; therefore her receipt of these benefits does not represent a substantial change of financial circumstances for termination of alimony. Plaintiff further argues that the alimony provision in the present case should be considered contractual alimony instead of court ordered alimony. He asserts that the Agreement was not specifically merged into the divorce decree and therefore it should stand as an independent contract. This court finds this argument unpersuasive. Contractual alimony is to be construed according to the parties’ intentions at the time that they entered into the agreement, which is evidenced by the writing itself in cases of a written contract. Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004). The court will not admit parol evidence to explain or clarify the words of a contract unless the Plaintiff has demonstrated an ambiguity in the contract. Id. Plaintiff has not demonstrated an ambiguity in the alimony termination provision; therefore, the termination provision is to be resolved solely in accordance with the ordinary meaning of its written terms. At the time of the Agreement, both parties recognized that the pension would enter into pay status and that Defendant would receive a portion of the pension in addition to the monthly alimony payments. Through his testimony, Plaintiff claims that he intended for alimony to be terminable when his pension went into pay status; however, he did not expressly clarify this intention. In analyzing the terms of the Agreement, this Court has found no express language regarding the termination or modification of alimony payments once Defendant began to receive a portion of Plaintiff’s pension. Furthermore, there is no express language in the agreement that would 6 indicate that the parties considered Defendant’s receipt of Plaintiff’s pension to be a substantial change of financial circumstances. Therefore, Plaintiff’s argument also fails under a contractual alimony theory. With respect to Defendant’s financial situation, we find it suspect to consider the increases in both parties’ gross incomes as relevant. However, if, consistent with Plaintiff’s assertions, the court were to consider the parties’ increased incomes, we would still find that no substantial change of financial circumstances had occurred. Defendant’s income has only modestly increased, by approximately $8,000 since the date of Agreement. On the other hand, Plaintiff’s income had increased by approximately $90,000 from the date of Agreement through 2006. Between the two parties, it would be Plaintiff, not Defendant, whose financial circumstances had changed substantially. In summary, Plaintiff has not met his burden of proof in demonstrating that there has been a substantial change in Defendant’s financial circumstances. At the time they entered into the agreement, both parties recognized and understood that Defendant would be receiving a significant portion of Plaintiff’s pension upon his retirement. With this knowledge, Plaintiff agreed to make indefinite monthly alimony payments of $779.09 to Defendant. Under the Agreement, Plaintiff was to continue to make these alimony payments even after his pension entered pay status, so long as there was no substantial change in Defendant’s financial circumstances. Though Plaintiff had the opportunity to include a provision in the Agreement that would have made Defendant’s receipt of a portion of his pension a substantial change of financial circumstances, he did not express his desire to do so during negotiations or in the Agreement. Given the situation, these tactics used by the Plaintiff in 2000 make perfect sense. The Court notes that Plaintiff’s divorce from the Defendant occurred 7 days after the execution 7 of the 2000 Marital Settlement Agreement. At that time, it appears apparent to this Court that the wife would not agree to the termination of her alimony upon receipt of the pension. In order to secure the divorce, it would appear that the Plaintiff agreed to the Marital Settlement Agreement as drafted in order to allow him to argue that distribution of his pension would constitute a change of circumstances at a later time. That time has now come, but it is clear to this Court that the wife did not agree to such an arrangement in 2000, and the contract she entered into with the Plaintiff is not ambiguous on this point. CONCLUSION Based upon the foregoing, it is our view that Husband has failed to meet his burden of showing that, at the present time, a substantial change of financial circumstances had occurred which warranted a termination in alimony. Therefore, the Court has denied Plaintiff’s petition to terminate alimony. Accordingly the following order is entered: ORDER OF COURT th AND NOW , this 27 day of November, 2007, after hearing on the Petition to Terminate Alimony, IT IS HEREBY ORDERED AND DIRECTEDDENIED that the Petition is . By the Court, _________________________ M. L. Ebert, Jr. J. 8 Wayne F. Shade, Esquire 53 West Pomfret Street Carlisle, PA 17013 Attorney for Plaintiff Hubert X. Gilroy, Esquire Jennifer L. Spears, Esquire Martson Deardorff Williams Otto Gilroy & Faller 10 East High Street Carlisle, PA 17013 Attorneys for Defendant 9