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Mendell v. Mendell

Decided: September 27, 1978.


On appeal from Superior Court, Chancery Division, Bergen County.

Lynch and Horn. The opinion of the court was delivered by Horn, J.A.D.


The issue in this appeal by defendant husband is whether he is entitled to a modification of certain terms of a "Property and Support Agreement" executed by him and plaintiff wife on September 19, 1974, incorporated by reference in the judgment of divorce entered on January 28, 1975. Following the judgment the parties amended the agreement on July 14, 1976.

Under the terms of the 1974 agreement, drawn when each party was represented by counsel, upon the sale of the parties' jointly-owned house*fn1 the wife was to receive a relatively small share of the proceeds and would then waive all rights to receive support and maintenance and certain other benefits. Simultaneously with the sale of the house she was to receive certain other assets by transfer from defendant husband. Specifically as related to the instant controversy, this agreement provided as follows:

The husband further represents and warrants that he is the sole owner of an undivided 1/3 interest in an investment known as the Regency Park Associates (mortgage) investment in Agawam, Massachusetts. The husband shall, simultaneously with the conveyance for value of the marital home, execute whatever documents are required to transfer free and clear and tax free to the wife his undivided 1/3 interest in the said Regency Park Associates investment. This document shall be self-executing in this regard, and a closing on the marital home shall operate to transfer Regency, although husband will execute whatever further documents are reasonably required. Between the date of execution of this agreement and the date of transfer of his interest in this investment, husband agrees that, in connection with this investment, he shall not transfer it, mortgage it, encumber it, give it, sell it, pledge it, use it as security for any business or personal loan, or perform any act with it which would

in any way affect the wife's ultimate ownership interest in Regency. Wife agrees that she shall not, prior to conveyance of the marital home, place upon any public record any evidence of this obligation of husband to convey his interest in Regency. The wife shall receive all of the monthly payments from the said Regency Park Associates investment commencing in the first month after the month in which the marital home is conveyed to a bona fide purchaser for value. (The husband shall pay the state or local stamp transfer tax in connection with the transfer of the Regency Park Associates investment to the wife, up to the first $1,000.00, the wife shall pay such taxes in excess of $1,000.00 but less than $2,000.00 and if the said stamp transfer taxes are greater than $2,000.00 the parties shall pay such taxes equally.)

This interest in the Regency Park mortgage was being liquidated by constant monthly payments of $2,392.07. The marital home was sold on February 2, 1976. The parties subsequently entered into negotiations for the purpose of revising the September 1974 agreement. Apparently, defendant had not transferred his interest in the Regency Park mortgage because such a transfer would have had a significant adverse tax impact. Therefore, a supplemental agreement was reached, dated July 14, 1976. It provided for the husband to pay the wife $9,000 in full satisfaction of amounts asserted by her as being due under the original agreement. This amount was to be paid in installments of $100 or $200, the smaller amount being allowed for any month in which the husband would be unemployed. Twenty-five percent "of each payment received by the wife shall be deemed to be alimony and the balance * * * shall be non-taxable to her." Upon default the entire balance was to become due. The supplemental agreement was similar in its provision as to the monthly payments of $2,392.07 to plaintiff. Although it omitted the provision for transfer of the undivided one-third interest to the wife, the language was otherwise substantially repeated. Added, however, was the following:

The supplemental agreement further provided that the husband shall not transfer or in any way encumber his interest and shall execute whatever documents are necessary to give the wife an unconditional secured interest, and that the wife is entitled to use her right to receive payments as collateral security for a loan to her. Finally, the agreement states that if the husband predeceases the wife she "shall be deemed to be and shall be the sole owner of the husband's remaining interest in the said investment." Moreover, "[t]he wife's rights under this paragraph are absolute and they shall not be affected in any way by her remarriage, death or any other event."

After the July 14, 1976 amendment to the 1974 agreement, defendant failed to meet the arrearage payments he agreed to. Plaintiff then moved for enforcement of litigant's rights as to same, and, among other relief, sought judgment for $8,400, the balance due under the arrearage agreement. Plaintiff also sought to have the monthly Regency Park mortgage payments sent directly to her bank.

Defendant cross-moved for modification of the January 1975 divorce order or a plenary hearing. In particular, he sought to have the court reduce plaintiff's share of the Regency Park mortgage, on the ground that his circumstances had adversely changed, in that his income as a real estate broker had been reduced drastically.

After a hearing on said motion the judge ordered, among other things, that defendant execute whatever documents were required to permit plaintiff's bank to receive and deposit in her account the monthly Regency Park mortgage payments of $2,392.07. The order also provided for defendant to liquidate the balance of the arrearage mentioned in the supplemental ...

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