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Schwartz v. Bogen

United States District Court, D. Minnesota

November 28, 2017

BRUCE G. SCHWARTZ, Plaintiff,
v.
ARDIS BOGEN f/k/a Ardis Schwartz, Defendant.

          Michael D. Schwartz and Brandon M. Schwartz, Schwartz Law Firm, Counsel for Plaintiff.

          Timothy A. Sullivan and Rebecca A. Chaffee, Best & Flanagan LLP, Counsel for Defendant.

          MEMORANDUM OF LAW & ORDER

          Michael J. Davis United States District Court

         I. INTRODUCTION

         This matter is before the Court on Defendant's Motion to Dismiss. [Docket No. 8] The Court heard oral argument on November 16, 2017. Because this action is barred by res judicata, the Court grants the motion to dismiss.

         II. BACKGROUND

         A. Factual Background

         1. The Parties' Marriage and Divorce

         In 1952, Plaintiff Bruce G. Schwartz married Defendant Ardis Bogen. (Compl. ¶ 15.) In 1953, Schwartz began working for Northwestern Bell Telephone Company. (Id. ¶ 2.) Eventually, he became the Chief Operating Officer for Pacific Bell and, then, he became an officer of AT&T. (Id. ¶¶ 3-4.)

         Schwartz is a participant or beneficiary under the AT&T Basic Bell System Management Pension Plan (“Pension Plan”). (Compl. ¶ 5.) The Pension Plan is subject to ERISA, which became effective in 1974. (Compl. ¶ 6.) The Pension Plan provides: “Assignment or alienation of pensions under this plan will not be permitted or recognized unless or otherwise required under applicable law.” (Compl. ¶ 14.)

         On May 5, 1981, Schwartz and Bogen entered into a Marital Property Settlement Agreement (“MPSA”) in the State of New Jersey, under which both waived and released all rights to equitable distribution under New Jersey law. (Compl. ¶ 16; Schwartz Aff. ¶11; Schwartz Aff., Ex. 2, MPSA ¶ 34(v).) Under the MPSA, Schwartz would pay Bogen alimony on the first day of every month “until the Husband shall retire from American Telephone & Telegraph Company, its affiliates or subsidiaries.” (MPSA ¶ 3.)

         Upon the Husband's retirement from American Telephone & Telegraph Company, or its affiliates or subsidiaries, the amount payable as alimony and support of the Wife as set forth in paragraph 3 shall cease. In lieu thereof, the Husband shall pay to the Wife, as and for her alimony and support, a sum equal to fifty (50%) of the Husband's basic Bell System Management Pension Plan, at the date of retirement. Said payment shall be made by Husband by check or money order at the residence of the Wife or at any place she may designate, in writing to the Husband. Said payment shall be payable in monthly installments on the first day of each month.

(MPSA ¶ 4.)

         The MPSA further provides: “The Husband's obligation to pay alimony and support to the Wife shall cease upon her death, the death of the Husband, or upon the Wife's remarriage, whichever event is earlier.” (Id. ¶ 5.)

         In 1983, Schwartz and Bogen were divorced in the State of New Jersey. (Compl. ¶ 17; Sullivan Aff., Ex. 2, Final Judgment of Divorce.) The Final Judgment of Divorce was entered on July 1, 1983, and incorporated the MPSA, as modified in the Final Judgment of Divorce. (Final Judgment of Divorce at 2.)

         The modification of the MPSA stated, in relevant part:

(A) In the event Wife remarried, the obligations of Husband to pay Fifty (50%) percent of the Husband's Basic Bell System Management Pension Plan shall terminate.
* * *
(C) In the event Wife marries after January 1, 1986, but on or before December 31, 1990, Husband shall pay Wife as equitable distribution, a yearly sum equal to twenty (20%) percent of Husband's Basic Bell System Management Pension Plan, computed at the value of said Basic Pension Plan on January 1, 1986.
* * *
(E) In the event Wife married after December 31, 1995, she shall not be entitled to any portion of Husband's Basic Bell System Management Pension Plan.
(F) The Husband's obligation under paragraphs A through D, inclusive, shall terminate upon his death or the death of Wife. . . . .

(Final Judgment of Divorce at 3.)

         In 1985, Schwartz retired from AT&T. (Compl. ¶ 18.) Neither Schwartz nor Bogen made a request for a qualified domestic relations order (“QDRO”) in 1985. (Id.)

         In 1989, Bogen remarried. (Compl. ¶ 19.) Neither Schwartz nor Bogen made a request for a QDRO in 1989. (Id.) After Bogen's remarriage, she filed tax returns declaring the payments from Schwartz as alimony. (Id. ¶ 23.)

         From 1989 through March 2016, Schwartz made payments to Bogen. (Compl. ¶¶ 20-21.) Both Schwartz and Bogen reported the payments as alimony on their federal tax returns. (Id. ¶¶ 22-23.) The payments were sent to Bogen in Minnesota. (Schwartz Aff. ¶ 19.)

         In March 2016, Schwartz contacted Bogen and told her that he realized that under the terms of the MPSA and the Final Judgment of Divorce he should have stopped making the alimony and support payments in 1995 because she had remarried. (Compl. ¶ 24; Schwartz Aff. ¶ 23; Schwartz Aff., Ex. 6.) On August 3, 2016, Bogen, through her attorney, retorted that the alimony payments were not alimony but rather, were an equitable distribution of the Pension Plan. (Compl. ¶ 24; Schwartz Aff., Ex. 7.) In an August 25, 2016 letter, Bogen opined that, because the decree and modification of property settlements between Schwartz and Bogen were negotiated and entered before the Retirement Equity Act of 1984, “the division of the pension was done without a QDRO.” (Id.)

         2. New Jersey Action

         On October 11, 2016, Bogen, through counsel, filed a Motion for Enforcement of Litigant's Rights in the Superior Court of New Jersey, Chancery Division, Family Part, requesting that Schwartz be compelled to pay 20% of his Pension Plan in monthly payments of $1, 426.32 per month. (Compl. ¶ 31; Sullivan Aff., Ex. 4.) Schwartz, through counsel, argued that the anti-alienation provisions of ERISA prevented Bogen from sharing his pension and entitled him to a refund of money already paid. (Sullivan Aff., Ex. 5.) He explicitly argued that there was no QDRO to divide his ...


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