Superior Court: No Entitlement to Ex’s Disability Benefits

Gina Passarella
The Legal Intelligencer
September 12, 2005

An Allegheny County, Pa., woman isn’t entitled to her ex-husband’s disability benefits paid out by his pension plan, the state Superior Court has ruled, even though their property settlement agreement included pension benefits.

The split decision from the three-judge panel that reversed and remanded the trial court ruling by Judge Randall B. Todd said a clear distinction exists between disability benefits and retirement-age pension benefits.

According to the opinion, the appellant in Cioffi v. Cioffi, Fred W. Cioffi, is in his early 50s and would not have collected any benefits had he not become disabled.

“[The] husband’s current disability pay functions as a substitute for earned income, and not an age retirement pension benefit,” Senior Judge Patrick R. Tamilia wrote in his opinion.

The court said ruling to the contrary would provide Maureen Cioffi, the appellee, with money she does not deserve.

“The trial court has reallocated husband’s disability benefits and, due to husband’s misfortune, unjustly rewarded wife with a windfall to which she is not entitled,” Tamilia said.

In her dissent, Judge Kate Ford Elliott said the court interpreted the property settlement agreement when there was no room for interpretation.

“There is no language in the parties’ agreement that differentiates between disability retirement benefits or any other retirement benefits,” Ford Elliott wrote.

Fred Cioffi’s attorney, Gail Elizabeth Suhr from Pittsburgh, said she hopes this ruling will help attorneys do a better job in writing property settlement agreements to avoid this type of confusion.

“This case is going to be of help in the future when we have a question of what we mean by pension,” Suhr said.

According to the opinion, the property settlement agreement was executed upon the couple’s divorce in August 1994. Tamilia said the agreement stated that the wife would receive 60 percent of the husband’s pension interest accrued through March 1, 1990, from both the Teamsters Local Union and the Boilermaker’s Retirement Account.

In 1999 the Social Security Administration determined that Fred Cioffi was disabled and he began collecting disability pension from the Boilermaker plan and disability benefits under the Teamsters plan respectively.

According to Tamilia’s opinion, the husband did not tell his ex-wife that he began collecting the benefits and specifically noted on the application for the Boilermaker plan that he was not bound by any domestic relations order that would affect those benefits.

In 2002, the opinion said, the wife discovered her ex-husband was receiving these benefits and submitted the property settlement agreement to the Boilermaker plan, which subsequently began to make payments to her.

The wife filed a Petition to Enforce Qualified Domestic Relation Orders in December 2003 to collect her portion of the benefits from the Teamsters plan and her portion of the benefits given to the husband before the Boilermaker plan began paying her.

The trial court found that the disability benefits were marital assets and 60 percent of those benefits were to be awarded to the wife, according to the opinion.

The husband owed the wife $17,061.88 for the Boilermaker plan and $50,880.00 for the Teamsters plan, the opinion said. The trial court ordered the husband to begin payment on Sept. 1, 2004, of 60 percent of future benefits under both plans, plus an additional 15 percent to reimburse the wife for the nearly $68,000 he owed her from benefits collected without the wife’s knowledge.

On appeal the Superior Court reversed and remanded the trial court’s ruling, saying both pension plans had various types of pension that could be collected.

The Boilermaker plan had an “age pension” and a “disability pension.” The Teamsters plan had a “normal retirement” and a “disability benefits” plan, according to the opinion.

The court found that the pension interest owed to the wife based on the property settlement agreement meant retirement-age pension.

Because the two plans made a distinction between these two types of benefits, the court concluded that the benefits collected by the husband before retirement were not part of the marital assets.

“We do not find it reasonable to conclude the parties were anticipating that husband would become disabled and collect disability benefits at the relatively young age of 50 and that wife, therefore, would benefit financially by collecting a portion of husband’s ‘retirement’ benefits at the age of 40,” Tamilia said.

The court also dismissed any concern that the wife would not collect the same amount of benefits when the husband retires because he had not been working. The opinion said that the Teamsters plan gives a service credit for the months an employee does not contribute to the pension due to the receipt of disability benefits under the pension plan.

Ford Elliott said the difference in the plans is irrelevant. There is no language that differentiates between the types of pension plans offered by Teamsters and Boilermakers in the property settlement agreement, she said.

“It is axiomatic that this court ‘must construe the contract only as written and may not modify the plain meaning under the guise of interpretation,'” she said, quoting the 1992 state Supreme Court case McMahon v. MacMahon.

The lawyer for Maureen Cioffi could not be reached for comment. Tamilia was joined in his opinion by President Judge Joseph A. Del Sole.