Hearn v. Hearn

Peter Hearn (plaintiff) and Pamela Hearn (defendant) divorced in 1999. The Hearns’ separation agreement provided that Peter’s civil-service federal-pension benefits would be divided between Peter and Pamela, with Pamela’s portion determined by multiplying the amount of each benefit payment by 50 percent of a fraction that represented the number of years and months of marriage in which Peter had contributed to his pension plan divided by the total number of years and months of Peter’s employment during which plan contributions were made. Peter and Pamela negotiated a proposed Civil Service Retirement and Survivor Annuity Benefits Order (CSRS order) that would tell the federal Office of Personnel Management (OPM) how to divide Peter’s pension benefits. The proposed CSRS order used the parties’ agreed-upon pro rata formula to calculate the payments owed to Pamela. The court entered the parties’ proposed CSRS order, and the order was submitted to the OPM. The OPM subsequently notified Peter that the OPM would apply the pro rata formula to the gross payment payable to Peter upon his retirement rather than to the net annuity. Peter filed a motion asking the court to instruct OPM to apply the pro rata formula to the net annuity instead of the gross payment. Peter argued that Peter and Pamela had discussed and agreed that Pamela’s share of the retirement benefit would be calculated based on the net amount. Pamela opposed Peter’s motion, asserting that she did not recall discussing net benefits and that Pamela had intended for her pro rata share of the benefits to be calculated based on Peter’s gross pension. At a hearing on Peter’s motion, Peter’s counsel admitted that neither the CSRS order nor the separation agreement used the word “gross.” Pamela’s counsel argued that pursuant to the Code of Federal Regulations (CFR), which applied to the CSRS order, the OPM applies a CSRS order to gross pension benefits unless the order specifies that the order is to apply to a net benefit. The court denied Peter’s motion, finding that the parties’ CSRS order was unambiguous because the CFR made clear that the CSRS order applied to Peter’s gross benefits. The court did not address Peter’s argument that the CSRS order did not reflect the parties’ mutual intentions regarding Peter’s pension. Peter appealed.