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Smith v. Smith

Decided: January 27, 1977.


For affirmance and remandment -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. For reversal -- None. The opinion of the court was delivered by Mountain, J.


[72 NJ Page 353] The parties to this suit, husband and wife, entered into a separation agreement in 1965. Some six years later, on September 13, 1971, significant amendments to our divorce law became effective. N.J.S.A. 2A:34-1 et seq. In April, 1972 the husband instituted this action for divorce based upon an 18-month separation. He also sought judicial approval of the earlier agreement. The wife filed an answer and counterclaim. She demanded that the agreement be set aside and declared invalid as being unfair and unconscionable. She also sought alimony and an equitable distribution of marital assets pursuant to N.J.S.A. 2A:34-23. By an amendment to her counterclaim she requested a divorce on the ground of adultery. The trial court granted defendant a divorce on her counterclaim and denied plaintiff's prayer for a no-fault divorce. It further determined that equitable distribution was foreclosed by the prior agreement. Subsequent to that ruling, this Court decided Chalmers v. Chalmers, 65 N.J. 186 (1974), Painter v. Painter, 65 N.J. 196 (1974), and Rothman v. Rothman, 65 N.J. 219 (1974), cases interpreting, inter alia, various aspects of the equitable distribution statute. The wife thereupon moved for a new trial claiming that these decisions did in fact establish her right to equitable distribution. The trial court granted the motion and the Appellate Division denied the husband's application for leave to appeal this interlocutory order. The

husband then applied to this Court. We granted leave to appeal and heard argument in this case and in Carlsen v. Carlsen, 72 N.J. 363 (1976), also decided this day, in order to clarify the circumstances under which a separation agreement entered into before passage of the new divorce law may affect a spouse's later claim to equitable distribution.

Mr. and Mrs. Smith were married in 1938. From modest beginnings in the used-car business, Mr. Smith rose to considerable success as the proprietor of a Cadillac dealership in Elizabeth. The marriage was a stormy one, and as early as 1955 Mrs. Smith consulted an attorney about a divorce. It was not until 1965, however, after she learned that her husband was maintaining an establishment elsewhere, that she finally decided on a separation. She selected an apartment in Florida and arranged with her husband for support for herself and the youngest child, who was still unemancipated. At that time, Mr. Smith's gross annual income was $157,584. He was the proprietor of a thriving business and owned assets having a total value of $621,764. Mrs. Smith had no independent income, and her sole individual asset was a savings account in the amount of $909. She was in poor health (she later underwent several cataract operations) and unlikely ever to be self-supporting.

A formal agreement was prepared and executed by the parties on September 30, 1965. The instrument is characterized by the husband as a "property settlement agreement" and by the wife as a "separation agreement." It provides that "[t]he Parties have agreed to live separate and apart and desire by this Agreement to settle their property rights and obligations." In addition to provisions concerning such matters as the maintenance of separate dwellings, non-interference with one another and visitation rights, the agreement contained the following provisions for the benefit and support of Mrs. Smith and the child, Robert:

1. She was to receive one-half the value of the marital home, appraised at $35,720; she was also to receive

her personal belongings and furniture and the sum of $100 to buy linens for her new apartment;

2. Additionally she was to have monthly support payments of $405, with an upward adjustment to $440 in case of rent increase;*fn1

3. There were to be annual payments of $200 for the purchase of Christmas presents and $500 to defray the cost of a summer vacation while Robert remained with Mrs. Smith;

4. All medical and dental bills were to be paid;

5. A "suitable automobile," was to be provided and maintained, including registration, fuel and insurance charges.

Paragraph Ninth of the instrument recites that the wife accepts the agreement in full and final settlement of all claims for support and maintenance.*fn2 In Paragraph Tenth the parties mutually released any and all claims they might have, or might thereafter have, against each other "for or by reason of any matter, cause or thing up to the date of the execution of this Agreement."*fn3 Paragraph Eleventh is a waiver of each ...

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