## Facts

- Peter Cormick Hearn and Pamela Hearn divorced in 1999 and agreed to divide Peter’s federal civil-service retirement benefits using a pro rata formula based on service during the marriage.
- In 2001, the circuit court entered a Civil Service Retirement and Survivor Annuity Benefits Order (CSRS order) implementing the agreed division.
- The Office of Personnel Management (OPM) advised that the formula would be applied to the gross amount of the benefit Peter would be entitled to receive.
- In 2006, Peter moved for an order directing that the pro rata formula be applied to his net annuity (after deductions), asserting the parties intended a net-based calculation.
- Pamela opposed, asserting she expected her share to be calculated on the gross benefit and did not recall any agreement to use net.
- The circuit court denied Peter’s motion without taking evidence or testimony.

## Issues

1. Whether the CSRS order, interpreted with applicable federal regulations, required the pro rata formula to be applied to the gross annuity rather than the net annuity.
2. Whether the circuit court erred by denying the motion without allowing Peter to present evidence supporting reformation of the CSRS order based on alleged mutual mistake.

## Decision

- The appellate court agreed that, as written and under governing federal regulations, the CSRS order applies the formula to the gross annuity unless the order expressly states otherwise.
- The appellate court held the circuit court erred by refusing to allow evidence on Peter’s claim that the written order failed to reflect the parties’ mutual intent.
- The judgment was vacated and the case remanded for further proceedings on the mutual mistake/reformation claim.

## Legal Principles

- For federal civil-service retirement benefits, OPM applies a domestic relations formula to the gross annuity unless the order expressly directs use of a net annuity.
- The parol evidence rule bars extrinsic evidence offered merely to contradict an unambiguous written instrument based on unilateral misunderstanding.
- An unambiguous written instrument may be equitably reformed upon clear and convincing proof of mutual mistake showing the writing does not express the parties’ actual prior agreement.
- When mutual mistake is properly alleged, the court must allow development of an evidentiary record sufficient to make factual findings on the parties’ intent.

## Conclusion

The CSRS order defaulted to a gross-annuity calculation under federal regulations, but the trial court was required to permit evidence on whether the order should be reformed for mutual mistake; the denial without an evidentiary hearing was vacated and remanded.


Hearn v. Hearn, 177 Md. App. 525, 936 A.2d 400 (Md. Ct. Spec. App. 2007)