Notes From the Courts: A Rose By Any Other Name

Marital Share of Spouse’s Pension Includes All Elements of the Pension Benefit

In a new application of an old theme, the Maryland Court of Special Appeals reiterated the basic concept of interpreting an agreement of the parties with regard to a spouse’s pension benefit.  In Pulliam v. Pulliam, filed on April 29, 2015, the Court held that a consent judgment was unambiguous and that all elements of the Husband’s pension benefit are to be included in the transfer to Wife of her marital share of Husband’s pension.

The facts of this case are straightforward.  At the time of the entry of a judgment of absolute divorce, the parties reached a settlement of their differences and subsequently created a consent order for review and signature by the judge.  The consent order contained all of the elements in the agreement of the parties.

The term of the consent order that the court was interpreting was written as follows:

“ORDERED, that the Defendant shall assign to the Plaintiff an interest in the Pension System for Law Enforcement officers of the State of Maryland as follows: One half of the Marital Share of his entire pension benefit.”

When the time came for Husband to sign the particular order needed to transfer Wife’s marital share to her, he refused to do so. He asserted that one particular piece of the Husband’s benefit (referred to as the Deferred Retirement Option Program or “DROP”) should not be included in the calculation of the transfer to Wife.  Husband argued that at the time of the divorce, Husband was not eligible to receive DROP as a part of his pension benefit and therefore Wife had no entitlement to this particular piece of the pension benefit either.

In its holding, the Court of Special Appeals applied ordinary principles of contract construction and held that there was no ambiguity in meaning of the consent order.

A reasonable person would determine that the language means exactly what it says, regarding the entire pension benefit.

The word “pension” encompasses whatever benefits are included in that pension, including those one party is not yet eligible for.  As we frequently see in disputes related to settlement agreements, careful drafting is essential to ensure that the plain meaning of the agreement of the parties is articulated when there is a division of retirement assets.