Opinion
DOCKET NO. A-4924-14T2
10-25-2016
ERIC L. MAURER, Plaintiff-Appellant, v. GEORGANNE MAURER, Defendant-Respondent.
O'Connell & Sussman, LLC, attorneys for appellant (Charles M. O'Connell, of counsel and on the brief). Michael B. Meltzer, attorney for respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet this opinion is only binding on the parties in the case and its use in other cases is limited. R.1:36-3. Before Judges Hoffman and O'Connor. On appeal from Superior Court of New Jersey, Law Division, Family Part, Hunterdon County, Docket No. FM-10-0473-14. O'Connell & Sussman, LLC, attorneys for appellant (Charles M. O'Connell, of counsel and on the brief). Michael B. Meltzer, attorney for respondent. PER CURIAM
Plaintiff Eric Maurer appeals from a May 22, 2015 post-judgment matrimonial order granting defendant Georganne Maurer's motion to enforce litigant's rights and denying plaintiff's cross- motion to amend the terms of their marital settlement agreement (MSA). We affirm.
I.
Plaintiff and defendant married in 1989. On April 29, 2014, plaintiff initiated this action for divorce. The parties attempted to negotiate a settlement agreement from May through November 2014. On November 17, 2014, the case came before a matrimonial early settlement panel at the courthouse. After six hours of conferencing and negotiations, the parties and counsel signed a handwritten matrimonial settlement agreement, the MSA. The section titled "Equitable Distribution" set forth the following division of the parties' property and assets:
1. Marital Residence[.] Defendant shall have sole possession and use of Marital Residence located [in] . . . Hope[,] NJ. [Plaintiff] waives any claim to same and will sign any document to transfer his ownership to [defendant]. [Home valued at] . . . .
2. Retirement Assets[.]
A. Husband has a 401(k) valued [at] . . . .
B. Wife has a pension valued at . . . .
C. Husband will provide wife [with] $30,000 from his 401(k) via a QDRO, the cost of which will be split evenly between the parties. This $30,000 offset equal[izes] the difference in value of [plaintiff's] 401(k) and value of [M]arital [H]ome and [defendant's] pension . . . .
3. There is a savings account at Fulton Bank. Defendant will be entitled to . . . from this account. Plaintiff will retain balance of account free and clear of any claim by [d]efendant.
4. Plaintiff will retain all of his stock options with . . . , his employer, free and clear of any claim by [d]efendant.
5. Each party will keep the automobile that they currently possess free and clear of any claim by the other party. Each party shall be responsible for [insurance] and other cost including maintenance for their own automobile. Each party will provide[] the title to each automobile to the party who possess[es] that auto.
6. Personal property has already been divided between the parties.
The MSA also addressed the issue of spousal support, stating "[a]limony shall be taxable to [d]efendant and tax deductible to [p]laintiff." The agreement required plaintiff to pay defendant weekly alimony until he reached the age of sixty-six, but permitted defendant to ask the court for an extension at that time. The agreement further addressed insurance and other issues, including attorney's fees.
After signing the MSA, the parties appeared before the court to finalize their divorce. The court received the MSA into evidence as Exhibit J-1. Both parties answered questions confirming they understood the agreement and found it fair and reasonable under the circumstances.
The judge found the parties entered into the MSA "freely, knowingly, and voluntarily," but noted he would not make any findings as to the terms of the agreement because he had not taken any testimony regarding the parties' circumstances. Under the MSA, the parties' assets (not including personal property) were divided almost equally, with plaintiff retaining total assets valued $200 less than defendant's total asset.
Defendant provided detailed calculations in her reply certification. The motion judge adopted these calculations in his opinion.
According to plaintiff, subsequent to the divorce hearing, his counsel began preparing a formal amended divorce judgment when he realized the need for an adjustment for taxes regarding the value of the parties' retirement accounts. Plaintiff asserted without this adjustment, defendant would receive a disproportionate share of their marital assets, contrary to the parties' intent to divide their assets equally. Plaintiff's counsel communicated this concern to defendant's counsel via letter dated January 6, 2015, but the parties were unable to resolve the issue.
Defendant then filed a motion to enforce litigant's rights when plaintiff refused to sign the deed to the former marital residence, and otherwise comply with the terms of the MSA. Defendant objected to plaintiff's attempt to renegotiate the MSA, emphasizing she gave up her claim for $20,000.00 in joint marital expenses and her share of various items of personal property, including a boat and a motorcycle, in order to settle. Defendant also claimed she accepted a lesser amount of alimony in order to settle the case.
Plaintiff responded with a cross-motion seeking to amend the MSA by adjusting the retirement accounts for taxes, relieving him of his obligation to pay the $30,000 offset, and giving him the entire balance of the Fulton Bank account. Defendant opposed the cross-motion, explaining she "made compromises" to settle the case "in good faith." In contrast to the unequal division of personal property in plaintiff's favor, defendant certified, "I was left with household furniture having no value and a house in need of significant repair."
On May 22, 2015, the court decided both motions, granting defendant's motion to enforce litigant's rights and denying plaintiff's cross-motion to amend the MSA. The judge found the parties intended to equally distribute their major assets and acknowledged plaintiff's tax argument. However, the judge found the alleged oversight regarding these tax consequences did not render the MSA unfair or unenforceable, as each side made concessions in order to reach a settlement. He also noted the parties expressly considered taxes when they addressed alimony, showing they did consider tax consequences, and therefore intended to distribute their retirement assets using unadjusted numbers. On this basis, the judge declined to "pull apart the integrated components of the settlement and re-mold one component to the benefit of one party and the detriment of the other."
A different judge decided these motions than the judge who entered the divorce on November 17, 2014. --------
This appeal followed.
II.
Plaintiff argues the MSA as written creates an unfair and inequitable result, calculating defendant will receive a $72,110.00 "windfall" when taxes and the offset are included. Plaintiff contends the failure to consider the tax impact on the retirement accounts constituted a mutual mistake, contravening the true intent of the parties to equally divide their assets. Defendant maintains no mutual mistake occurred, asserting she agreed to the MSA based upon all of its terms as stated.
We give deference to the family court's findings of fact which are supported by evidence of record. Cesare v. Cesare, 154 N.J. 394, 413 (1998). The judge's interpretation of law is subject to our plenary review. Crespo v. Crespo, 395 N.J. Super. 190, 194 (App. Div. 2007) (citation omitted).
Divorce settlement agreements, "if found to be fair and just, are specifically enforceable in equity." Konzelman v. Konzelman, 158 N.J. 185, 194 (1999) (citing Schlemm v. Schlemm, 31 N.J. 557, 581-82 (1960)). "Marital agreements are essentially consensual and voluntary and as a result, they are approached with a predisposition in favor of their validity and enforceability." Massar v. Massar, 279 N.J. Super. 89, 93 (App. Div. 1995) (citing Petersen v. Petersen, 85 N.J. 638, 642 (1981); Dworkin v. Dworkin, 217 N.J. Super. 518, 524 (App. Div. 1987)).
Nevertheless, "[m]arital property settlement agreements 'involve far more than economic factors' and must serve the strong public and statutory purpose of ensuring fairness and equity in the dissolution of marriages." Conforti v. Guliadis, 128 N.J. 318, 323 (1992) (quoting Rothman v. Rothman, 65 N.J. 219, 229 (1974)). In order to ensure fairness, "[t]here is no dispute that courts possess the equitable authority to modify privately negotiated property settlement agreements." Addesa v. Addesa, 392 N.J. Super. 58, 66 (App. Div. 2007) (citing Conforti, supra, 128 N.J. at 323). Moreover, any marital agreement that is unconscionable or is the "product of fraud or overreaching" may be set aside. Guglielmo v. Guglielmo, 253 N.J. Super. 531, 541, 549 (App. Div. 1992) (quoting Dworkin, supra, 217 N.J. Super. at 523). However, a trial court's duty to ensure fairness does not require it "to insert new terms because one party later suggests that a few changes would have made the agreement fairer." Dworkin, supra, 217 N.J. Super. at 523 (citing Smith v. Smith, 72 N.J. 350, 359 (1977)).
Furthermore, although we apply equitable principles to ensure a matrimonial agreement is fair and just, we apply contract principles to ascertain an agreement's meaning. See Pacifico v. Pacifico, 190 N.J. 258, 265-66 (2007) (citations omitted). "[I]t is a basic rule of contractual interpretation that a court must discern and implement the common intention of the parties." Id. at 266 (citing Tessmar v. Grosner, 23 N.J. 193, 201 (1957)). A marital settlement may be reformed when by the "common mistake" of the parties, it fails to express their true intent. Miller v. Miller, 160 N.J. 408, 419 (1999) (citing Capanear v. Salzano, 222 N.J. Super. 403, 407 (App. Div. 1988)).
Regarding common or mutual mistake, under general contract principles, "[a] compromise which is the result of a mutual mistake is not binding and consent to a settlement agreement is not considered freely given when it is obtained as the result of a mistake." Wallace v. Summerhill Nursing Home, 380 N.J. Super. 507, 509 (App. Div. 2005) (quoting Lampley v. Davis Mach. Corp., 219 N.J. Super. 540, 550 (App. Div. 1987)).
"Reformation based on mutual mistake requires clear and convincing evidence that the parties' minds have met in a prior existing agreement that their written agreement fails to express." Allied Bldg. Prods. Corp. v. J. Strober & Sons, LLC, 437 N.J. Super. 249, 263 (App. Div.) (citing Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 608 (1989)), certif. denied, 220 N.J. 207 (2014). "[T]he burden of proving mutual mistake must be clear, unequivocal, and convincing." Reinhardt v. Wilbur, 30 N.J. Super. 502, 506 (App. Div. 1954).
With these principles in mind, we turn to plaintiff's legal arguments. First, plaintiff contends the motion judge erred in rejecting his request to modify the MSA because the failure to calculate the after-tax value of the pensions represented a mutual mistake. We disagree.
In Conforti, supra, 128 N.J. at 319, 321, the appellant sought reformation of a lease accompanying her divorce property settlement agreement, contending insertion of the lease's termination provision was a mutual mistake contrary to the parties' intent and enforcing it would be unfair. In response, her former husband filed a certification asserting the provision was in accord with their intent. Id. at 321. The trial court denied the appellant's application for a plenary hearing, finding her certifications did not demonstrate the "clear and convincing proof" required for equitable reformation, and that no further evidence was needed to resolve the dispute. Id. at 321-22.
We reversed, and the New Jersey Supreme Court affirmed, holding the parties conflicting affidavits raised issues of material fact sufficient to warrant a plenary hearing on the issue of mutual mistake and the parties' intent. Id. at 322, 328-29. The Court also remanded to consider whether the provision was inequitable and unfair, since losing the property in question could have deprived the appellant of her primary source of income and support. Id. at 325-26, 328-29.
In the case under review, plaintiff did not request a plenary hearing. Not every factual dispute relating to matrimonial proceedings necessitates a plenary hearing, but trial judges cannot resolve material factual disputes on conflicting certifications. Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.) (citations omitted), certif. denied, 142 N.J. 455 (1995). A trial court must hold a plenary hearing when a motion raises disputed issues of material fact. Tretola v. Tretola, 389 N.J. Super. 15, 20 (App. Div. 2006) (citations omitted). Nevertheless, we find plaintiff did not demonstrate a genuine issue of material fact sufficient to warrant a plenary hearing, nor did he demonstrate the "clear and convincing" evidence required for reformation based on mutual mistake.
In support of his argument for modification, plaintiff points to the language of the MSA, arguing the $30,000 offset expressed the parties' intent to "equalize" the values between defendant's pension and the home and plaintiff's 401(k). The motion judge found the parties intended to equally divide their listed assets. Not counting plaintiff's tax calculations, they achieved this goal. The judge did not find, however, that the parties intended for their distribution of assets to be equal only after accounting for the tax consequences to their pensions.
Rather, the judge found the parties intended to divide their assets as set forth on the record at the time of the divorce. Although plaintiff claimed before the motion judge the MSA was negotiated under "time constraints," the parties had been negotiating for six months. The record lacks evidence showing the parties' intent to consider the tax impact of each marital asset. As noted by the motion judge, the parties explicitly addressed the tax consequences regarding alimony but declined to address them with regard to the pensions. As a result, the judge found no issue of fact to warrant a plenary hearing and found no "clear and convincing" evidence of mutual mistake requiring reformation of the MSA.
Plaintiff also argues enforcement of the MSA will cause an unjust and inequitable result. We disagree. In Glass v. Glass, 366 N.J. Super. 357, 373 (App. Div.), certif. denied, 180 N.J. 354 (2004), we noted when a marital settlement is an "integrated agreement" resolving several issues such as equitable distribution and spousal support, "[n]o one element stands alone and can be read without reference or consideration of the others." Relying on Glass, the motion judge here found the MSA fair, even with the alleged tax oversight, as it was part of a fully integrated agreement where each party made concessions in order to reach a settlement.
We affirm substantially based upon the well-reasoned opinion of the motion judge. R. 2:11-3(e) (1)(E). The judge relied upon the unrebutted statement by defendant that she made various concessions to settle the case relying on the terms as written. Specifically, defendant stated in her certifications she gave up claims for joint marital expenses and personal property, including a boat and motorcycle, in order to reach a settlement. Defendant also stated she accepted a lesser amount of alimony than she originally wanted. Plaintiff did not dispute these contentions. The parties negotiated an integrated agreement, and we will not now disturb it because plaintiff asserts a change in terms would be more fair. Dworkin, supra, 217 N.J. Super. at 523.
Moreover, unlike Conforti, supra, 128 N.J. at 325-26, plaintiff proffers no compelling evidence showing enforcement of the agreement would cause an unconscionable result, such as Mrs. Conforti's loss of her sole source of income. Plaintiff does not allege he would lose his primary source of support should we uphold the MSA. Plaintiff also provides no evidence of fraud or overreaching in the negotiations that would create an equitable basis to amend the MSA. Guglielmo, supra, 253 N.J. Super. at 541 (finding inequity where the wife in a divorce "received inadequate advice from an attorney with a conflict of interest." Id. at 550). Here, each side had the benefit of independent counsel.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION