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Home My WebLink About00-5132 CivilHOLLY C. HOFFMAN-BAUER, RESPONDENT/PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 00-5132 CIVIL TERM HARRISON BAUER, PETITIONER/DEFENDANT IN DIVORCE IN RE: PETITION FOR CIVIL CONTEMPT AND TO ENFORCE MARITAL SETTLEMENT AGREEMENT OPINION AND ORDER OF COURT Bayley, J., August 6, 2003:-- Petitioner, Harrison Bauer, and respondent, Holly C. Hoffman-Bauer, were married on September 17, 1994. They separated in April, 1999. They were divorced by a final decree on April 23, 2002.1 The decree provides that a marital settlement agreement dated April 14, 1999, "is incorporated, without merger herein." The marital settlement agreement contains the following provisions: WIFE'S Profit Sharing Plan. The marital portion of the WIFE'S Retirement Account, known as The Carlisle Pediatrics Associates Profit Sharing Plan, hereinafter "Plan", to be divided equally between the parties, is agreed by the parties to be the sum of $153,257.20, effective December 31, 1998. This agreement as to the value is based upon statements provided by the Plan Administrator, Asset & Wealth Services, Inc. valuing the WIFE'S interest in the Plan at $83,006.42 on September 30, 1994 and at $236,663.61 on December 31, 1998. Therefore, the HUSBAND'S marital share of the value of the Profit Sharing Plan on December 31, 1998 is $76,828.60. 1 For ease of reference we will still refer to them as husband and wife. 00-5132 CIVIL TERM In the event of a Divorce the HUSBAND shall be entitled to an Order of Court, in the form of a Qualified Domestic Relations Order (QDRO) awarding HUSBAND as Alternate Payee as his sole and separate property $76,828.60 of WIFE'S interest in the Plan, effective December 31, 1998, together with interest, earnings, gains or losses on said benefit through the last valuation date provided by the Plan Administrator preceding the assignment. The QDRO shall direct the Plan Administrator to segregate, transfer and maintaining the benefits assigned to the HUSBAND as the Alternate Payee as a separate account in his name and to allow him to roll such sum over into an IRA or other tax deferred account as designated by him. The QDRO shall be prepared by the WIFE'S attorney at sole cost to the WIFE and to be in a form approved by the WlFES'S Plan Administrator. (Emphasis added.)2 Wife has refused to prepare and execute a Qualified Domestic Relations Order. The Agreement provided that wife pay husband alimony pendente lite until September 15, 2001. Wife still owes husband $13,553 on this obligation but under the terms of the Agreement, husband owes her $3,448 in babysitting costs for their child. Thus, wife owes husband a net $10,105. Husband filed a petition to (1) hold wife in civil contempt, and (2) enforce the marital settlement agreement upon which a hearing was conducted. A Rule to show cause why respondent should not be adjudicated in contempt was made absolute. An adjudication has been conducted with the issues briefed and ready for disposition. On February 27, 2003, in a separate case in this court, wife obtained what is now a final judgment of $71,001 against husband for his invasion of her privacy. The : The parties stipulate that the valuation date will now be June 30, 2003. It appears that because of market conditions the final valuation of husband's interest in wife's Profit Sharing Plan may be less than $76,828.60. -2- 00-5132 CIVIL TERM complaint in that case was filed on June 4, 2001.3 Wife maintains she is not in contempt for not paying husband the $10,105 she owes him under the marital settlement agreement and executing a Qualified Domestic Relations Order to distribute a part of her Profit Sharing Plan to him because she may offset her judgment against her obligations to him. Offset is defined as a "counter-claim demand which defendant holds against plaintiff, arising out of a transaction extrinsic of plaintiff's cause of action." M.N.C. Corp. v. Mount Lebanon Medical Center, Inc., 510 Pa. 490, 509 A.2d 1256 (1986) (quoting Black's Law Dictionary 1230 (rev. 5th ed. 1979)). It is founded on equitable principles, and is not a legal right. In Earley's Appeal, 103 Pa. 273 (1883), the Supreme Court stated: "To set off one judgment against another is not a legal power nor is its exercise demandable of right. Burns v. Thornburgh, 3 Watts 78; Wellock v. Cowan, 16 S. & R. 318. It will therefore not be exercised where it would be against equity." The parties agree that wife's Profit Sharing Plan is protected by the Employee Retirement Income Security Act, (ERISA), 29 U.S.C. § 1001 et seq. If she executes a QDRO the funds transferred to husband cannot be attached to satisfy her civil judgment. 29 U.S.C. § 1056(d)(3)(A). Wife argues that it would be inequitable not to allow her to offset her civil judgment against her obligations to husband because he is 3 01-3407 Civil. -3- 00-5132 CIVIL TERM currently a sentenced inmate on a count of rape in a Pennsylvania state correctional institution with no assets to execute against to collect her judgment. The parties' property settlement agreement provides: Release: Both parties agree that the hereinabove set forth Agreement constitutes an equitable distribution of their marital property and equitable resolution of all other economic claims pursuant to the provisions of the Divorce Code and each party irrevocably waives, releases, and remises any claim to ownership of or interest in any property designated as the property of the other virtue of the provisions of this Agreement. (Emphasis added.) Husband's argument is that wife essentially is seeking to modify her contractual obligation to him because he now owes her money that he did not owe when the contract was executed. Offset, however, is an equitable remedy extrinsic to the marital contract, the validity of which wife is not challenging. Wife's lawsuit that resulted in the judgment against husband was not filed until after the marital contract was signed on April 14, 1999. However, the cause of action, based on husband secretly videotaping them having sexual relations, arose before the final decree in divorce was entered on April 23, 2002, which is the date wife became obligated to execute a QDRO. On these facts, equity warrants offsetting wife's judgment against the money she owes husband under the terms of the marital settlement agreement. ORDER OF COURT AND NOW, this day of August, 2003, IT IS ORDERED: (1) The judgment of Holly C. Hoffman-Bauer against Harrison Bauer at 01-3407 Civil is offset against the financial obligations of Holly C. Hoffman-Bauer in the parties' -4- 00-5132 CIVIL TERM marital settlement agreement dated April 14, 1999. (2) Harrison Bauer's interest in Holly C. Hoffman-Bauer's Profit Sharing Plan shall be forthwith valued as of June 30, 2003. (3) If Harrison Bauer's interest in the Profit Sharing Plan exceeds the total of the amount due to satisfy the judgment at 01-3407, within fifteen (15) days of the valuation, Holly C. Hoffman-Bauer shall execute a QDRO for the difference and shall pay Harrison Bauer $10,105. (4) If Harrison Bauer's interest in the Profit Sharing Plan is less than the total amount due to satisfy the judgment at 01-3407, Holly C. Hoffman-Bauer may offset the difference against the $10,105 she owes Harrison Bauer. The balance, if any, shall be paid by Holly C. Hoffman-Bauer within fifteen (15) days of the valuation. (5) The petition to hold Holly C. Hoffman-Bauer in civil contempt, IS DISMISSED. By the Court, Carol J. Lindsay, Esquire For Plaintiff Marlin L. Markley, Esquire For Defendant Edgar B. Bayley, J. :sal -5- HOLLY C. HOFFMAN-BAUER, RESPONDENT/PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. 00-5132 CIVIL TERM HARRISON BAUER, PETITIONER/DEFENDANT IN DIVORCE IN RE: PETITION FOR CIVIL CONTEMPT AND TO ENFORCE MARITAL SETTLEMENT AGREEMENT ORDER OF COURT AND NOW, this day of August, 2003, IT IS ORDERED: (1) The judgment of Holly C. Hoffman-Bauer against Harrison Bauer at 01-3407 Civil is offset against the financial obligations of Holly C. Hoffman-Bauer in the parties' marital settlement agreement dated April 14, 1999. (2) Harrison Bauer's interest in Holly C. Hoffman-Bauer's Profit Sharing Plan shall be forthwith valued as of June 30, 2003. (3) If Harrison Bauer's interest in the Profit Sharing Plan exceeds the total of the amount due to satisfy the judgment at 01-3407, within fifteen (15) days of the valuation, Holly C. Hoffman-Bauer shall execute a QDRO for the difference and shall pay Harrison Bauer $10,105. (4) If Harrison Bauer's interest in the Profit Sharing Plan is less than the total amount due to satisfy the judgment at 01-3407, Holly C. Hoffman-Bauer may offset the difference against the $10,105 she owes Harrison Bauer. The balance, if any, shall be 00-5132 CIVIL TERM paid by Holly C. Hoffman-Bauer within fifteen (15) days of the valuation. (5) The petition to hold Holly C. Hoffman-Bauer in civil contempt, IS DISMISSED. By the Court, Carol J. Lindsay, Esquire For Plaintiff Marlin L. Markley, Esquire For Defendant Edgar B. Bayley, J. :sal